Personal Finance--Annuity Payments Comparisons
All of the answers are either: Straight-Life Annuity, Life with Period Certain Annuity, Installment Certain Annuity, Joint and Survivor Annuity
Terms
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- Straight-Life Annuity
- has the highest payouts
- Installment Certain Annuity
- guarantees payments to the annuitant or beneficiary for a fixed period of time
- Joint and Survivor Annuity
- payments are based on the life expectancies of 2 annuitants
- Straight-Life Annuity
- payments stop upon annuitant's death
- Straight-Life Annuity
- also known as a pure annuity
- Installment Certain Annuity
- does not guarantee lifetime income to the annuitant
- Joint and Survivor Annuity
- there may be reduced benefit for the surviving annuitant
- Life with Period Certain Annuity
- guarantees a lifetime income even if he or she lives past his or her life expectancy
- Joint and Survivor Annuity
- lower payment than any of the other choices
- Straight-Life Annuity
- you cannot outlive it
- Straight-Life Annuity
- the insurance company is betting that they may only pay for a short period of time based on your lifespan
- Straight-Life Annuity
- the insurance company likes this one the most
- Life with Period Certain Annuity and Installment Certain Annuity
- What 2 forms of payments are more risk to the insurance company?
- Life with Period Certain Annuity
- guarantees a minimum number of installments (payments) to annuitant or beneficiary
- Straight-Life Annuity
- very few people choose this option