Understanding Indexed Products SELF DIRECTED FINAL EXAM (CT 6000112036)

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

The guaranteed rate an insurer will pay on an indexed annuity during an interest crediting period is known as the __________________________.

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?

What is the most prominent feature of an indexed annuity that distinguishes it from other types of annuities?

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?

Select the one correct statement from the following list.

Caroline has an indexed life insurance policy that has been in force for one year. She pays a premium that she wants to allocate to a strategy different from the current strategy she had selected. Which of the following statements is true with respect to this latest premium payment?

Sue owns an indexed life insurance policy that does not offer an annual minimum guaranteed interest rate. The linked index produces a loss of (2%). What is the minimum credit her policy will receive?

Which of the following situations shows Joe Producer acting incorrectly with respect to illustration requirements?

Jan wants to keep her annuity contract in force for a certain number of years. If she does so, the contract will pay a higher rate. What type of bonus is available with Jan’s contract?

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?

You’re meeting with Martha, an elderly client. You haven’t seen her in a couple years. Which of the following would NOT cause doubts as to whether or not she is still mentally competent and is able to understand the product you are selling?

You expect to take an annuity application in an upcoming face-to-face interview. When do you need to deliver the disclosures to the applicant or owner?

A prospect asks you to explain the purpose of a waiver such as a nursing home or terminal illness waiver. Which of the following answers would you give?

A certain insurer’s indexed annuity contract promises that the owner will be eligible to earn exactly the same interest rate gain as the linked index experiences. This is an example of which of the following?

Your prospect, George, asks, “Isn’t there a feature of some annuities that causes the rate to be paid differently if the owner makes a withdrawal or surrenders the contract before the end of a specified guarantee period?” If there is such a feature, what is it called?

A certain insurer’s annuity contract provides that the participation rate is 80% with no cap. 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?

In explaining the “moving parts” of an indexed annuity to a prospect, you cover all of the following EXCEPT which one?

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?