Types of Policies
What is an immediate annuity (SPIA) designed to do upon single-premium purchase?
Answer and explanation
Answer: B. Single Premium Immediate Annuities (SPIAs) begin distributing income payouts within 12 months of purchase.Source: NAIC Annuity Buyer's Guide — PDF page 3, Immediate Annuities
More types of policies questions
- An equity-indexed policy has an 80% participation rate and a 10% cap. If the underlying index grows by 15% in a policy year, what interest rate is credited?
- An indexed universal life policy's referenced index has a negative result for the crediting period. Which contract feature should the owner examine to determine the lowest credited rate?
- An individual purchases a life insurance policy that provides coverage for exactly one year. At the end of the year, the policyowner can renew the coverage without proving insurability, but the premium will increase based on their attained age. What type of policy is this?
- 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?
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