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A Solved 14. All of the following are common modal | Chegg.com However, the income is not guaranteed to last through the remainder of the life of the annuitant. As long as profits are possible, more firms will enter the market, reducing the profits to each individual firm in a monopolistic competition. The insurance company will use this information to determine the payout rate, which establishes the amount of income that the insurer will pay, and the duration of the payout period. How much will daughter Trudy receive at Troy's death : option b. Seeking help from a financial advisor can help individuals evaluate the advantages and disadvantages of annuitization and determine the best payout option for their situation. What term refers to the payments received or payments or deposits made. All of the following are common modal annuitization payout option WebMost annuitizations permit you to elect an optional Cost of Living Adjustment (COLA) to your annuity payments. Desire for Guaranteed Income. A straight life annuity pays the annuitant a fixed income for life. As each bond matures, the principal can be reinvested or used for income. If a retiree has little or no other sources of income, annuitization can provide a stable income stream to cover living expenses.Desire for Guaranteed Income. If the withdrawal is within five to seven years of purchasing the annuity, they may also owe the annuity provider a surrender charge of up to 20%, depending on how much time has passed since the purchase. Annuitization is a financial strategy that involves converting a lump sum payment into a guaranteed stream of income for a specific period or for life. This option is ideal for individuals who want to ensure that their beneficiaries receive a guaranteed income for a set period of time. Mathematics The correct answer is: Once the payout option is selected, it cannot be changed after payments begin. The policy has a 10-year surrender charge associated with it. The exclusion ratio is used to determine which part of the payment will be excluded from income tax liability. A This period is after the accumulation. $500,000 A lump sum payment allows the annuitant to receive the entire value of the annuity at one time. 100% (4 ratings) Transcribed image text: 14. Annuitization may be appropriate for those with a long life expectancy, lack of other sources of income, and a desire for a guaranteed income stream.