CAS CAS Annuity Riders and Contract Provisions

Question 1

What does a Guaranteed Minimum Income Benefit (GMIB) rider on a variable annuity guarantee?

Accepted Answer

The right to annuitize based on a minimum benefit base after a waiting period

Answer

A minimum death benefit regardless of account value

Answer

A guaranteed interest rate on the entire premium

Answer

Protection against surrender charges

Question 2

Which annuity rider provides a guaranteed percentage increase to the benefit base each year the contract owner does not take withdrawals?

Accepted Answer

Rollup rider

Answer

Return of Premium rider

Answer

Guaranteed Minimum Accumulation Benefit (GMAB)

Answer

Enhanced Death Benefit rider

Question 3

What is the primary purpose of a Return of Premium (ROP) death benefit rider on an annuity?

Accepted Answer

To ensure the death benefit is at least equal to total premiums paid

Answer

To guarantee lifetime income payments

Answer

To waive surrender charges upon death

Answer

To double the account value at death

Question 4

A Guaranteed Minimum Withdrawal Benefit (GMWB) rider on an annuity guarantees that the contract owner can withdraw:

Accepted Answer

A specified percentage of a benefit base annually until the premium is recovered

Answer

The full account value at any time without penalty

Answer

An unlimited income stream regardless of account balance

Answer

A lump sum equal to the original premium upon surrender

Question 5

Which annuity contract provision allows a policyholder to withdraw a portion of the contract value each year without triggering surrender charges?

Accepted Answer

Free withdrawal provision

Answer

Free-look provision

Answer

Annuitization clause

Answer

Market value adjustment

Question 6

What does a nursing home or confinement waiver rider on an annuity typically allow?

Accepted Answer

Surrender charges to be waived if confined to a nursing home for a qualifying period

Answer

Premium payments to stop while in care

Answer

Free lifetime income if placed in long-term care

Answer

Policy ownership to transfer to the care facility