Free Annuities Practice Questions
North Carolina Life, Accident & Health exam — 66 practice questions.
Subtopics: Purpose, Deferred annuity, Variable annuity, Annuitization, Annuity grace period, Annuity reinstatement, Annuity misstatement of age, Group annuity certificates, Annuity surrender charges at death, Annuity application, Annuity disclosure timing, Annuity disclosure free look, Annual annuity report, Principles, Immediate vs deferred, Products, Payment options, Uses, Taxation, Parties to an annuity, Flexible premium annuity, Cash refund option, Installment refund option, Period certain option, Annuity units, Separate account, Tax-deferred accumulation, Exclusion ratio, Early withdrawal penalty, Death before annuitization, Qualified vs nonqualified, Structured settlement, Annuity exclusion ratio, Indexed annuities, Market value adjustment, Variable annuities, Payout options, Bonus annuities, Annuity disclosure, Annuity death benefit, Annuity taxation, 1035 exchanges, Surrender charges, Parties, Suitability
Read the Annuities study guide
Sample questions & answers
1. An annuity is primarily used to:
Provide a stream of income, often during retirement
An annuity systematically liquidates a principal sum into income payments and protects against the risk of outliving one's savings.
2. A deferred annuity is characterized by:
An accumulation phase before income payments begin
A deferred annuity accumulates value on a tax-deferred basis during the accumulation phase before payments begin at a later annuitization date.
3. A variable annuity places contract values in separate accounts, which means:
The owner bears the investment risk
Variable annuity values move with separate-account investments, so the owner bears the investment risk; in North Carolina a producer needs the variable life and variable annuity line of authority, which requires meeting FINRA requirements.
4. Annuitization of a deferred annuity refers to:
Converting the value into periodic income
Annuitization is the process of converting the annuity's accumulated value into periodic income payments based on the chosen settlement option.
All Life, Accident & Health topics
Practice: Annuities
Answer choices are shuffled every time, and every question comes with an explanation.
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
