Series 6 - Investment Company And Variable Contracts Products Representative Exam

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Which of the following statements about annuities is true?

An annuitant may never cash in his annuity
A
If the annuitant dies during the accumulation period, the beneficiary may receive the cash value
B
An annuitant who surrenders his annuity must pay incomes taxes on the growth on the policy plus a 20% early withdrawal penalty if he is under age 59 1/2
C
If the annuitant dies during the accumulation period, the beneficiary is not liable for income tax on any growth of the annuity.
D

Explanations

If the annuitant dies during the accumulation period, the insurer must pay the beneficiary the cash value OR the total of all premiums paid (the higher of the two).

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