Tennessee Insurance Practice Exam

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Prepare for the Tennessee Insurance Exam with engaging flashcards and comprehensive multiple-choice questions. Understand hints and receive detailed explanations for each query. Ace your test with confidence!

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What is a benefit of a straight life annuity?

Payments stop after a specified term
It guarantees payments for the annuitant’s lifetime
Payments can increase with inflation
It offers return of premium options

The correct answer is: It guarantees payments for the annuitant’s lifetime

A straight life annuity is designed to provide income for the lifetime of the annuitant, ensuring that they receive consistent payments for as long as they live. This unique feature guarantees that the annuitant's financial needs are met throughout their life, offering security and peace of mind, especially for those concerned about outliving their savings. Unlike other annuity options that might have specific terms or include features like inflation adjustments or return of premiums, the straight life annuity focuses solely on providing lifelong income without the complexities or limitations brought by those additional features. This makes it an attractive choice for individuals who prioritize lifetime income stability over other considerations.