14. All of the following are common modal annuitization payout options EXCEPT:
a. lump-sum
b. monthly
c. quarterly
d. annually
15. What is the process of converting an annuity's accumulated value into a periodic income stream?
a. commutation
b. annuitization
c. dollar averaging
d. laddering
16. Troy purchased a deferred annuity for $ 100,000, naming himself and his wife as joint annuitants and his daughter, Trudy, as beneficiary. Ten years later, the contract had grown to $ 235,000, and Troy decided to annuitize under a joint and survivor life payout. He and his wife had received income totaling $ 50,000 when Troy died. How much will daughter Trudy receive at Troy's death?
a. $ 0
b. $ 100,000
c. $ 135,000
d. $ 180,000
Q 14) All of the following are common modal annuitization payout options except : option a. lump sum | |||||||
Q 15) What is the process of converting an annuity's accumulated value into periodic income stream : option b. annuitization | |||||||
Q 16) Troy purchase a differed annuity for $100,000 naming himself and his wife as joint annuitants and his daughter, Trudy, as beneficiary. Ten years later, the contract had grown to $235,000, and Troy decided to annuitize under a joint and survivor life payout. He and his wife had received income totaling $50,000. How much will daughter Trudy receive at Troy's death : option b. $100,000 |
ANSWERS :
14. a. lump-sum
Lump-sum is one time payment and therefore not an annuity. Monthly, quarterly and annual are annuity.
15. b. Annuitization .
Periodic income stream is annuity of a lump-sum value of accumulated annuity of deposits. This method is usually used for retirement planning.
16. a. $0
Troy died in the payout phase, so, beneficiary Trudy, will not get anything as per rules. Also, there is no specific clause in the contract otherwise.
payout for the duration of joint annuitants’ lives—An annuity income stream can be based on two lives. Called a joint and survivor income option, this approach pays an income stream aslong as either of the two annuitants is alive. In other words, when the first annuitant dies, income payments continue to the surviving annuitant until the survivor’s death. The amount of income that is paid after the death of the first annuitant is normally specified as some portion of the original income stream, such as one-half, two-thirds, or 100 percent.
So Troys wife would continue to get payments, the daughter gets 0.
The answer to 16 above me is incorrect.
14. All of the following are common modal annuitization payout options EXCEPT:
14) Which of the following statements about life income settlement options is (are) true?I. Under a joint-and-survivor life income option, payments cease at the death of the second (last) surviving) annuitant,II. Under a life income with guaranteed period, a contingent beneficiary is guaranteed a minimum number of payments regardless of when the primary beneficiary dies.A) I onlyB) II onlyC) both I and II]D) neither I nor II15) Bruce left a question about heart disease blank on his life insurance application...
Determine the appropriate number of Qualified Dependents for the following taxpayer: T) is unmarried and supports his son and his son's wife, both of whom lived with him for the entire year. His son and daughter-in-law (both age 20) file a joint return to get a full refund, as their gross income was $3,500. Both son and daughter-in-law are full-time students at a local college. QUESTION 2 Identify the best Filing Status for the following taxpayer: Ted is divorced and...
Comprehensive Income Tax Course: Module 1 4. Randy turned 16 last year and had his first summer job. Even though his parents are claiming him as a dependent he wants to file a return in order to get his refund. He receives his W-2 and decides he can do his own return using form 1040-EZ. Which of the following information is not found on a Form W-2? a) The taxpayer’s Social Security number b) The taxpayer’s wages, tips and other...