AD Banker Comprehensive Practice Exam

Which action is NOT permitted by an annuity policyowner?

1. Select or change the settlement option

2. Name and change the beneficiary

3. Change the annuity date

4. Determine the policy's interest credit

The correct answer is: Determine the policy's interest credit

In the context of an annuity policy, the policyowner typically has specific rights and privileges outlined in the policy contract. Among these rights is the ability to select or change settlement options, which can determine how the benefits of the annuity will be paid out to the annuitant or beneficiaries. Additionally, the policyowner is allowed to name and change beneficiaries, ensuring that they can adjust who receives the death benefits in accordance with their wishes. Changing the annuity date is also within the policyowner’s rights. The annuity date is significant, as it marks the point at which the annuity will begin making periodic payments to the annuitant, and policyowners can request changes to this date based on their financial strategies or personal circumstances. Conversely, the determination of the policy's interest credit is typically not within the control of the annuity policyowner. The interest credit on an annuity is predefined by the terms of the contract or based on the performance of the underlying investments, and while the policyowner may have some influence through their choice of annuity type, such as fixed or variable, they do not have the authority to unilaterally change or dictate the interest credit that the policy earns. This action is generally established by the insurer