A financial representative is discussing settlement options with a client preparing to annuitize a non-qualified variable annuity contract. Which of the following statements regarding annuitization payout options are correct?
- The straight life payout option yields the highest monthly benefit for a given contract value because all insurer obligations terminate upon the annuitant's death.Cevap
- A life annuity with a period certain guarantees that if the annuitant dies during the designated period, payments continue to the beneficiary for the remainder of that duration.Cevap
- CAnnuitization is a revocable decision that allows the contract owner to surrender the annuity at any time to receive the remaining lump-sum cash balance.
- DUnder a joint and last survivor payout option, monthly payment amounts increase automatically upon the death of the primary annuitant to account for surviving spouse expenses.
Cevap
The correct statements are that the straight life payout option yields the highest periodic benefit because payments cease at death, and that a life annuity with period certain guarantees payments to a beneficiary for the remaining timeframe if the annuitant dies early.
The straight life option generates the highest periodic income because payments stop immediately upon the annuitant's death without beneficiary obligations. The period certain option guarantees that if the annuitant dies during the specified period, the beneficiary receives the remaining payments for that term. Both statements correctly describe payout options.
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Annuity Annuitization Payout Options and Settlement Mechanics
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