Which Settlement Option Pays a Stated Amount To An Annuitant
- The Refund Annuity. A refund annuity guarantees a certain minimum amount will be paid, regardless of when the annuitant dies.
- Cash Refund Annuity. The insurer promises that if the sum of the periodic income payments received by the annuitant does not meet or exceed the amount of the cash value ...
- Installment Refund Annuity. ...
- Period Certain Annuity. ...
What are the settlement options for an annuity?
Settlement Options for Annuities. If an annuitant dies shortly after benefits begin, the insurer keeps the balance of the unpaid benefits. This settlement option will pay the highest amount of monthly income to the annuitant because it's based only on life expectancy with no further payments after the death of the annuitant.
What is a a period certain annuity?
A period certain annuity is a settlement option that guarantees payments for a specific number of years, typically 5 to 20 years. If the annuitant dies before the policy is over, the payments can be passed to a beneficiary. I’m a licensed financial professional focusing on annuities and insurance for more than a decade.
How do joint life and survivorship annuities work?
With a joint life and survivorship (or last survivor) annuity, there are more than one (usually two) annuitants, and both receive payments until one of them dies. A stated monthly amount is paid to the annuitant and upon the annuitant's death, the same or a lesser amount is paid for the lifetime of the survivor.
What type of annuity would the annuitant be seeking?
The type of annuity she is seeking is called An annuitant would like to determine the current value of her annuity. To do this, she multiplies the number of "accumulation units" she owns times the unit value of the "separate account". What kind of annuity BEST matches this description?
Which settlement option pays a stated amount to an annuitant quizlet?
(The settlement option that pays a specified amount to an annuitant, but pays no residual value to a beneficiary is known as life income.)
What form of the annuity settlement options provides payments to an annuitant?
Joint life annuity settlement option pays benefits to two or more annuitants, but stops upon the death of the first.
What are the settlement options for an annuity?
Annuity payout options include: Single Life/Life Only. Life Annuity with Period Certain (Fixed Period/Guaranteed Term) Joint and Survivor Annuity. Lump-Sum Payment.
Which type of annuity settlements stops when the annuitant dies?
Like all annuities, a straight life annuity provides a guaranteed income stream until the death of the annuity owner. What makes a straight life unique is that, once the annuitant dies, all payments stop and no more money or death benefits are due to the annuitant, their spouse, or heirs.
What is a fixed period settlement option?
Fixed Period Option — a life insurance option that may be selected as a settlement under which the policy proceeds are left on deposit with the insurance company to accrue interest and are paid to the beneficiary in equal payments for a specific number of years.
What is interest only settlement option?
With an interest-only settlement, the insurance company holds the principal of the death benefit and pays any earnings on that amount to the beneficiary. You can think of this settlement format as a savings account you fund for your loved one.
What are the four most common settlement options?
The four most common alternative settlement approaches are: the interest option, under which the insurer holds the proceeds and pays interest to the beneficiary until such time as the beneficiary withdraws the principal; the fixed period option, under which the future value of the proceeds is calculated and paid in ...
Is a structured settlement an annuity?
What is a Structured Settlement? A structured settlement annuity (“structured settlement”) allows a claimant to receive all or a portion of a personal injury, wrongful death, or workers' compensation settlement in a series of income tax-free periodic payments.
What is variable annuity settlement?
Variable Annuities. Variable annuities typically pay a death benefit to someone you designate. That person can receive all the money remaining in the account or an agreed upon guaranteed minimum.
What is annuitization of an annuity?
Annuitization is the process of converting an annuity investment into a series of periodic income payments. Annuities may be annuitized for a specific period or for the life of the annuitant. Annuity payments may only be made to the annuitant or to the annuitant and a surviving spouse in a joint life arrangement.
Which of the following annuity payment options will pay the estate of the annuitant if the full value of the account was not received?
Which of the following annuity payment options will pay the estate of the annuitant if the full value of the account was not received? If the holder of a unit refund annuity dies before receiving the full investment value from the separate account, his or her estate gets a "refund" of the remaining value.
Is an annuitant dies before annuitization occurs What will the beneficiary receive?
Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount - If an annuitant dies before annuitization, the beneficiary will receive either the amount paid into the plan or the cash value of the plan, whichever is greater.
What is variable annuity settlement?
Variable Annuities. Variable annuities typically pay a death benefit to someone you designate. That person can receive all the money remaining in the account or an agreed upon guaranteed minimum.
Which payment option pays an income for the life of the annuitant or for a specified period whichever is longest?
The annuity Life Income Option (as does the Life Settlement Option in life insurance) pays a benefit as long as the annuitant lives, and upon death, all payments cease.
Under which of the following annuity options does the annuitant select the time period?
Under the installments for a fixed period annuity settlement option, the annuitant selects the time period for the benefits; the insurer determines how much each payment will be. This option pays for a specific amount of time only, and there are no life contingencies.
What is an annuitant in regard to an annuity policy?
An annuitant is an individual who is entitled to collect the regular payments of a pension or an annuity investment. The annuitant may be the contract holder or another person, such as a surviving spouse. Annuities are generally seen as retirement income supplements.
How long does an annuity receive income?
Thus, with this option the annuitant will receive payments for as long as he or she lives.
What happens to an annuity if the annuitant dies?
Therefore, if the annuitant dies after payments have started but before the guaranteed number of years (the "certain installments") has elapsed, the annuitant's beneficiary will receive income payments until the remainder of the guaranteed period expires. So, if Mr. Smith, the annuitant, retires at age 65 and selects the life with 10 years certain option and dies at age 70, his survivor will continue to receive the monthly annuity payments for the balance of the period certain, in this case five more years.
What is a temporary annuity?
Under a temporary annuity certain, the company guarantees that payments will be made for a specified number of years. Since this income is guaranteed, if the annuitant dies before receiving payments for the full specified period of time, the annuitant's beneficiary will receive the payments for the remaining number of years.
How long does a survivor of Smith's annuity last?
So, if Mr. Smith, the annuitant, retires at age 65 and selects the life with 10 years certain option and dies at age 70, his survivor will continue to receive the monthly annuity payments for the balance of the period certain, in this case five more years.
How long does an annuity last?
Another type of annuity is the life annuity with period certain, which guarantees payments for a certain minimum number of years – typically 10, 15, or 20 (most often, the period is 10 years because this is the approximate average life expectancy of a male who retires at age 65). Obviously, the annuitant could outlive the minimum number of years specified in the contract, in which case the income payments continue until his or her decease.
What is the difference between an annuity and a refund?
The main difference between the two is that the refund annuity guarantees an amount at least equal to the purchase price of the contract will be paid out. If the annuitant lives for an extended amount of time after annuity income payments begin, he or she could receive more in benefits than the contract cost.
What is life annuity?
The life annuity is a general payout category in which the payout is guaranteed for life. Sometimes known as a straight life annuity, the life annuity pays a benefit for as long as the annuitant lives, and then it ends. Whether the annuitant lives past 100 years of age or dies one month after the annuity period starts, the annuity payments will continue only until he or she dies. In other words, there is no guarantee as to the minimum amount of benefits under a life annuity.