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  4. Annuities

Free Annuities Practice Questions

Alabama Life, Accident & Health exam — 37 practice questions.

Subtopics: Annuitant, Accumulation period, Single premium, Surrender charge, Pure life annuity, Refund annuity, Indexed annuity, Suitability, Principles, Immediate vs deferred, Products, Payment options, Uses, Taxation, Parties to an annuity, Flexible premium annuity, Cash refund option, Installment refund option, Period certain option, Annuity units, Separate account, Tax-deferred accumulation, Exclusion ratio, Early withdrawal penalty, Annuitization, Death before annuitization, Qualified vs nonqualified, Structured settlement, Annuity exclusion ratio

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Sample questions & answers

1. In an annuity contract, the annuitant is the person:

Whose life determines the income payments

The annuitant is the individual whose life expectancy is used to calculate income payments.

2. The accumulation period of a deferred annuity is the time during which:

Premiums are paid in and grow tax-deferred

During accumulation, contributions are made and earnings grow tax-deferred before payout begins.

3. A single premium deferred annuity is funded by:

One lump-sum payment, with income deferred to a later date

An SPDA is funded with one lump sum and defers income payments to a future date.

4. A surrender charge on a deferred annuity is:

A fee for withdrawing funds during the early contract years

Surrender charges are fees that apply to withdrawals during the contract's early years and typically decline over time.

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Practice: Annuities

Take a randomized, timed-style practice test. Answer choices are shuffled and your results are scored instantly with an explanation for every question.

Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.