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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Retirement Products

Ms. Kapoor, a 55-year-old retiree, wants a pension product under which the annuity payments continue to her spouse after her death, and on the death of the spouse the purchase price is returned to the nominee. Which annuity option fits?

A joint life last survivor annuity with return of purchase price fits. It pays the pension to the retiree and then to the spouse until the last survivor dies, after which the original purchase price is paid back to the nominee.

  1. AJoint life last survivor annuity with return of purchase priceCorrect
  2. BLife annuity without return of purchase price
  3. CAnnuity certain for 10 years
  4. DDeferred annuity with vesting at 60

Explanation

A joint life last survivor annuity pays until the death of both annuitants. The return of purchase price feature gives back the amount invested to the nominee after the last survivor dies. A single life annuity without return ends on death with nothing payable, and an annuity certain pays only for a fixed term.

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