Practice Quiz

Health and Life Insurance

Category - Annuities & Policies

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What is the justification for the decreasing term life rider as part of the retirement income annuity?
  1. If the annuitant dies before retirement, the beneficiary will receive annuity payments and the death insurance payments.
  2. If the annuitant does before retirement, the premiums are refunded to the survivor
  3. If the annuitant retires early, the premiums will pay for out of pocket expenses until benefits start
  4. If the annuitant chooses not to retire, the annuity will expire.
Explanation
Answer: A - The justification for the decreasing term life rider as part of the retirement income annuity is to provide for the beneficiary should the annuitant die prior to payouts. When the annuitant dies, if prior to age 65, the decreasing term life insurance is combined with the annuity so that the beneficiary can receive the payments.
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