Types of Policies
What surrender charge feature is common in fixed annuity contracts during early policy years?
Answer and explanation
Answer: B. CDSC surrender charges decrease over time (e.g., 7%, 6%, 5%...) to discourage early contract liquidations.Source: NAIC Annuity Buyer's Guide — PDF page 4, Surrender Charges
More types of policies questions
- A worker buys an annuity at age 45 and plans to begin income at age 65 after years of tax-deferred accumulation. Which classification best fits?
- An annual renewable term policy keeps the same death benefit for each one-year term. What normally happens to its premium from year to year?
- An annually renewable term policy is renewed for another year. What happens to the premium and to the evidence of insurability?
- 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?
- An annuity buyer wants to select investment subaccounts and accepts that poor performance could reduce contract value below contributions. Which annuity is the direct match?
- An annuity owner wants income payments for as long as the owner lives, without adding a spouse or a minimum payment period. Which payout basis matches that request?
590 Texas questions like this one.
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