Annuities
An annuitant wants income for life but wants a minimum amount to reach heirs if she dies early. Which option fits?
Answer and explanation
Answer: D. A life option with a period certain or refund guarantee pays for life and assures a minimum to beneficiaries if death comes early. Pure life offers no such guarantee, an annuity certain is not a life contingency at all, and an interest-only arrangement leaves the principal untouched.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, life contingency options
More annuities questions
- In an annuity contract, whose life measures the income payments?
- The index referenced by a fixed indexed annuity falls sharply in a year. What ordinarily happens to the contract value?
- What benchmark rate is used in variable annuity payout calculations to determine whether monthly annuity payment amounts increase or decrease?
- What characterizes a single premium immediate annuity?
- What distinguishes an annuity certain from a life contingency option?
- What does a guaranteed minimum withdrawal benefit provide?
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