Types of Policies
What benchmark rate is used in variable annuity payout calculations to determine whether monthly annuity payment amounts increase or decrease?
Answer and explanation
Answer: B. If subaccount investment performance exceeds the AIR, monthly payouts increase; if performance falls below AIR, payouts decrease.Source: SEC Investor Bulletin — Variable Annuities — PDF page 3, Assumed Interest Rate
More types of policies questions
- A convertible term policy says conversion is available only under the policy's stated conversion provision. The owner asks for permanent coverage beyond the policy's allowed conversion amount without underwriting. What is the best response?
- A couple wants one policy whose death benefit becomes payable only after both insureds have died. Which structure meets that objective?
- A deferred annuity stops building value for future income and begins making scheduled income payments. Which phase has begun?
- A homeowner wants life coverage designed to decline roughly as a repayment mortgage balance declines. Which type is most directly suited to that pattern?
- A joint policy insures two partners and pays its death benefit when either partner is the first to die. How should the policy be classified?
- A married couple buys a survivorship life policy for estate tax planning. The husband dies first. What happens to the policy?
590 Texas questions like this one.
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