Test your annuity knowledge with this quiz

What do you know about annuities?

What do you know about the often maligned financial product that can do things other retirement tools can’t?

Insurance industry research and education organization LIMRA recently quizzed 2,000 U.S. adults to gauge the annuity knowledge of the average American. They found that most Americans didn’t understand the features and benefits of annuities. But they did find that the more people learned about annuities, the more they liked them as a retirement savings tool.

Take this quiz to test your knowledge

Mouse over or tap each question to see if you know the correct answer, and how many others got it right or wrong.

Question 1

True or False

If the owner of an annuity dies, the insurance company keeps the money in the annuity.

Mouse over or tap for answer

FALSE

4 out of 10 Americans answered correctly. Did you?

When you purchase an annuity, you can designate one or more people to be beneficiaries of the annuity when you pass away.

Question 2

True or False

Taxes on annuity earnings are not levied until the annuity owner withdraws them.

Mouse over or tap for answer

TRUE

5 out of 10 Americans answered correctly. Did you?

Catholic United annuities operate on a tax-deferred basis.

Question 3

True or False

Annuity owners cannot use funds from workplace retirement plans or pensions to fund annuities.

Mouse over or tap for answer

FALSE

3 out of 10 of Americans answered correctly. Did you?

Money from employer-sponsored retirement plans like 401(k)s and 403(b)s, even pensions, can be used to fund annuities.

Question 4

True or False

Annuity owners will lose all their money if an insurance company goes out of business.

Mouse over or tap for answer

FALSE

3 out of 10 Americans answered correctly. Did you?

Institutional strength, robust company surplus numbers, contractual guarantees and government audits protect annuity owners from this happening.

Question 5

True or False

If an owner withdraws money from an annuity during the first year after purchase, the insurance company charges them a fee.

Mouse over or tap for answer

TRUE

5 out of 10 of Americans answered correctly. Did you?

This charge is called a surrender charge. Catholic United applies a surrender charge to withdrawals during the first 5 to 7 years of an annuity contract.

Question 6

True or False

Insurance companies can offer types of annuities that are guaranteed to grow in value.

Mouse over or tap for answer

TRUE

5 out of 10 Americans answered correctly. Did you?

All of the annuities offered by Catholic United Financial have GUARANTEED rates of return.

Question 7

True or False

Annuities are for people who have been investing for a long time and can’t tolerate risk anymore.

Mouse over or tap for answer

FALSE

4 out of 10 Americans answered correctly. Did you?

Annuities are owned by many types of investors regardless of their risk tolerance, and contribute security to a balanced financial portfolio

Question 8

True or False

Annuities are the only type of financial product that can create guaranteed income that you cannot outlive.

Mouse over or tap for answer

TRUE

2 out of 10 of Americans answered correctly. Did you?

It’s true. Once annuitized, an annuity provides income for the life of the owner.

How did you do?

According to LIMRA, only one out of four Americans scored 70% or higher on this quiz. Did you know the truth about annuities?

Maybe this quiz sparked your interest in how an annuity can provide you with guaranteed retirement income that you can’t outlive?

Talk to one of our sales representatives to get to know this misunderstood financial tool.

Find your local representative

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¹Source: https://www.limra.com/en/newsroom/news-releases/2020/limra-consumers-confidence-in-the-economy-declines-during-the-pandemic-but-confidence-in-life-insurers-jumps/

²Source: https://www.lifehappens.org

What do you know about annuities?

What do you know about the often maligned financial product that can do things other retirement tools can’t?

Take this quiz to test your knowledge

Question 1

If the owner of an annuity dies, the insurance company keeps the money in the annuity.

FALSE

When you purchase an annuity, you can designate one or more people to be beneficiaries of the annuity when you pass away.

Question 2

Taxes on annuity earnings are not levied until the annuity owner withdraws them.

TRUE

Catholic United annuities operate on a tax-deferred basis.

Question 3

Annuity owners cannot use funds from workplace retirement plans or pensions to fund annuities.

FALSE

Money from employer-sponsored retirement plans like 401(k)s and 403(b)s, even pensions, can be used to fund annuities.

Question 4

Annuity owners will lose all their money if an insurance company goes out of business.

FALSE

Institutional strength, robust company surplus numbers, contractual guarantees and government audits protect annuity owners from this happening.

Question 5

If an owner withdraws money from an annuity during the first year after purchase, the insurance company charges them a fee.

TRUE

This charge is called a surrender charge. Catholic United applies a surrender charge to withdrawals during the first 5 to 7 years of an annuity contract.

Question 6

Insurance companies can offer types of annuities that are guaranteed to grow in value.

TRUE

All of the annuities offered by Catholic United Financial have GUARANTEED rates of return.

Question 7

Annuities are for people who have been investing for a long time and can’t tolerate risk anymore.

FALSE

Annuities are owned by many types of investors regardless of their risk tolerance, and contribute security to a balanced financial portfolio

Question 8

Annuities are the only type of financial product that can create guaranteed income that you cannot outlive.

TRUE

It’s true. Once annuitized, an annuity provides income for the life of the owner.

How did you do?

According to LIMRA, only one out of four Americans scored 70% or higher on this quiz. Did you know the truth about annuities?

Maybe this quiz sparked your interest in how an annuity can provide you with guaranteed retirement income that you can’t outlive?

Talk to one of our sales representatives to get to know this misunderstood financial tool.

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