Question

1. what are premium deposits in a variable annuitys subaccounts applied to purchase?

○ a. shares
○ b. annuity units
○ c. accumulation units
○ d. rights

1. when are annuity owners limited as to the amount of premium they can contribute to their contracts?

○ a. when any portion of the premiums is allocated to the insurers separate account
○ b. when the contract is the funding vehicle for a qualified plan
○ c. when the owner is also the annuitant
○ d. at no time, because annuities never impose limits on contributions

1. what are fixed annuity premium deposits invested in?

a. the insurers separate account
b. the insurers general account
c. a stock market index
d. the states insurance guaranty fund

Explanation:

1. For variable annuities, during the accumulation phase, premium deposits into subaccounts are used to buy accumulation units, which track the performance of the underlying investments. Annuity units are used during the payout phase, while shares and rights are not the correct terminology here.
2. Qualified retirement plans (which can be funded by annuities) have annual contribution limits set by tax regulations. Unqualified annuities typically have no contribution limits, and the other options do not trigger premium limits.
3. Fixed annuities guarantee a set return, so their premium deposits are invested in the insurer's general account, which holds conservative, fixed-income assets. Separate accounts are for variable annuities, stock indexes are not the investment vehicle for fixed annuities, and state guarantee funds are a protective measure, not an investment.

Answer:

1. c. accumulation units
2. b. when the contract is the funding vehicle for a qualified plan
3. b. the insurer's general account