QUESTION 1

1. A variable annuity contract can be defined as a contract in which the insurance company varies the annuity payments based on the net income of the insurance company. If the net income of the insurance company increases, then the annuity payments associated with a variable annuity contract will increase.

   True

   False

5.55555 points

QUESTION 2

1. All annuities are a contract between a purchaser and an insurance company in which the purchaser agrees to make a lump sum payment or series of payments in return for disbursements based on the performance of the Standard and Poors 500 Stock Index, beginning either immediately (within 12 months) or at some future date. Annuity contracts are an effective way for people to gain exposure to the stock market because the annuity payments can only increase over time.

   True

   False

5.55555 points

QUESTION 3

1. All annuity contracts have a feature that protects the annuitant from inflation.

   True

   False

5.55555 points

QUESTION 4

1. An annuity contract where there are two annuitants (called joint annuitants), usually a husband and wife and the periodic payments continue until the death of both is an example of a Period Certain Annuity.

   True

   False

5.55555 points

QUESTION 5

1. An annuity is a contract between an annuitant and an insurance company in which the company promises to make periodic payments to the annuitant, starting immediately or at some future time. The annuitant buys an annuity either with a single payment or a series of payments called premiums.

   True

   False