Types of Policies
An annuitant wants lifetime income but also wants payments guaranteed for at least 15 years if death occurs early. Which payout basis addresses both goals?
Answer and explanation
Answer: B. A life-with-period-certain basis pays for the longer of the annuitant’s life or the selected fixed period, satisfying both lifetime-income and minimum-period goals. A fixed period alone can end while the annuitant lives, life-only lacks the minimum, and withdrawal is not a continuing payout option.Source: NAIC — Buyer’s Guide for Deferred Annuities — Guide page 8, Payout Options — for the longer of your lifetime or a set time period
More types of policies questions
- A prospect wants permanent insurance with adjustable policy elements and cash value allocated to insurer-managed separate-account investments. Which product is the best fit?
- A prospect wants permanent life insurance, wants to choose among stock and bond investment options, and accepts possible cash-value loss. Which product best fits?
- A renewable term policy states that renewal rights end at a specified age. The insured reaches that age and wants another term. Which statement is most accurate?
- A retiree hands an insurer a single premium and wants income payments to start about one month later. Which annuity fits?
- A retiree makes one annuity purchase payment and wants income payments to begin within the next year. Which classification applies?
- A return-of-premium term policy reaches the end of its stated term and the insured is alive. What does the policy pay and what happens to coverage?
590 Texas questions like this one.
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