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  4. Annuities

Free Annuities Practice Questions

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

Subtopics: Deferred annuity, Indexed annuity, Surrender charge, Exclusion ratio, Owner rights, Joint and survivor, Qualified annuity, Annuitant, 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, Early withdrawal penalty, Annuitization, Death before annuitization, Qualified vs nonqualified, Structured settlement, Annuity exclusion ratio

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Sample questions & answers

1. A deferred annuity differs from an immediate annuity because it:

Begins payout more than one period after purchase

A deferred annuity delays the income start date, allowing the value to accumulate before payout begins.

2. A fixed indexed annuity credits interest based in part on:

The producer's commission

A fixed indexed annuity ties interest crediting to a market index, subject to caps, participation rates, or floors.

3. A surrender charge on a deferred annuity is:

A fee for withdrawing funds early in the contract

Surrender charges are fees applied to withdrawals taken during the early years of a deferred annuity.

4. For a nonqualified annuity in payout, the exclusion ratio determines:

The portion of each payment that is a tax-free return of principal

The exclusion ratio identifies the nontaxable return-of-principal portion of each annuity income payment.

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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.