Understanding Indexed Products FINAL EXAM (NJ 88901481)

When a crediting rate is to be based on the earnings of the insurer’s total portfolio of assets, the rate is said to be which of the following?

Jason compared the guaranteed minimum interest rates for his fixed deferred annuity contract with market rates. If his deferred annuity is typical, he most likely found that the guaranteed minimum interest rate was ____________________.

What is the typical means for determining the amount of an annuity surrender or withdrawal charge?

Sharon owns an annuity and wants to receive payments only for a specific number of years, even if she dies before the end of that time period. Which annuitization option do you recommend?

Select the one correct statement from the following list.

A certain insurer’s annuity contract provides that the participation rate is 100% and the cap rate is 7.5%. If the index gain is 10%, what rate of interest will be credited to the annuity account?

Suppose an indexed annuity contract includes an 80% participation rate, no cap, and a 3% spread. If the index gain is 10%, what is the rate that will be credited to the annuity?

A client who owns a participating whole life insurance policy asks you about dividends. You list a few situations that can result in dividends. Which of the following is NOT a part of your explanation?

John wants to reallocate his premiums among strategies after the annuity contract is in force. Based on your knowledge of what is typical for most insurers, which of the following statements is NOT correct?

Interest is generally taxable when credited for all of the following EXCEPT which one?

Select the true statement.

Annette, age 55, withdraws funds from her annuity. Is there a penalty for this withdrawal? If so, what is the penalty?

Paul, an annuitant, chose a period certain payout. He died before the period ended. His beneficiary is his wife, Marian. What happens now?

A calculation that compares the premiums paid into the annuity contract to the expected return in order to determine the tax-free portion of annuitized payments results in which of the following?

People over age 65 are likely to find each of the following to be an advantage of having an annuity EXCEPT which one?

Another agent comments that he’s not surprised he sells more ____________ than any other product, because it’s the best known and most widely used type of interest sensitive life insurance.

In an indexed life insurance policy, a “bucket” refers to which of the following?

Your friend William owns an indexed life insurance policy with a segment term of five years. He asks you on what date the change in the index is calculated and when crediting occurs. You answer that although insurance company practices differ, it would typically occur _____________________________.

Norm, age 55, is an annuity prospect. Which of the following is NOT one of the advantages you will review with him?

Insurer ABC offers an indexed life insurance policy with a feature that guarantees to credit 0.5% of the average monthly account value annually when the policy begins its 10th year in force. What is this feature called?

Carol’s family history of cancer makes her nervous about how she would pay her medical bills if she becomes a cancer patient. Which rider would you recommend that permits a percentage of the indexed life insurance policy death benefit to become available to an insured with a terminal illness expected to result in death in 12 months or less?

Suppose the current index gain is 12%. The previous period’s gain was 11%. The indexed life insurance policy’s participation rate is 100% and the cap is 9%. The insurer is using the annual point-to-point crediting method. What percentage will be credited to the account value for this segment term?

An agent makes a recommendation. The insurer reviews it to ensure suitability. Why?

Your client, Brian, is 50 years old. He expects to need the money he’s investing for retirement at age 70, and has a life expectancy of 85 years. Which of the following represents Brian’s time horizon?

Under what type of indexed crediting strategy is the rate based on the difference between the index value at the start of the term and the highest value at certain points during the term?