Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

In the context of investments in securities, what typically happens if the annuitant dies before the annuity start date?

The annuity payments begin immediately to the annuitant's estate.

The beneficiary receives the accumulated value of the annuity.

The contract is voided and all funds are forfeited.

The insurance company keeps all contributions with no payout.

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Verified step by step guidance

Understand the concept of an annuity: An annuity is a financial product that provides a series of payments to an individual (the annuitant) over time, typically after a specified start date. It is often used for retirement planning.

Identify the key parties involved: In an annuity contract, there is the annuitant (the person receiving payments), the beneficiary (the person designated to receive benefits if the annuitant dies), and the insurance company (the issuer of the annuity).

Analyze the scenario: If the annuitant dies before the annuity start date, the accumulated value of the annuity (the contributions made plus any investment earnings) is typically paid to the beneficiary. This ensures that the funds are not forfeited or kept by the insurance company.

Clarify the terms of the contract: The specific terms of the annuity contract dictate what happens in this situation. Most contracts include provisions for the beneficiary to receive the accumulated value, but it is important to review the contract for any exceptions.

Conclude the explanation: The correct answer is that the beneficiary receives the accumulated value of the annuity, as this is the standard practice in most annuity contracts to protect the contributions made by the annuitant.