Types of Policies
A retiree hands an insurer a single premium and wants income payments to start about one month later. Which annuity fits?
Answer and explanation
Answer: C. An immediate annuity is bought with a single premium and starts paying within one payment interval, typically a month for monthly income. A deferred annuity accumulates first and pays later.Source: NAIC Buyer's Guide to Deferred Annuities — Immediate and deferred annuities: when income payments begin
More types of policies questions
- An insured buys convertible term at age 30 and converts it to permanent insurance at age 40. Which age generally determines the new premium?
- An insured develops a health condition halfway through a 20-year level term policy. What happens to the fixed death benefit and premium specified for that term?
- An insured outlives a return-of-premium term policy, and no death benefit was paid. What feature may then apply according to the contract?
- An insured’s health deteriorates during a renewable term policy. At the end of the term, which feature is most valuable?
- An insured's health worsens before a renewable term policy expires. The renewal right is still available. Which outcome best reflects that feature?
- An owner buys a $100,000 ordinary whole life policy. How do cash values accumulate over the life of the policy?
590 Texas questions like this one.
Every answer explained, the ones you miss come back on a spaced schedule, and a plan built from your exam date.