Tennessee Life Producer Practice Exam

Which item is typically NOT found in an annuity contract?

1. Premium payment details

2. Death benefits

3. Accidental Death and Dismemberment coverage

4. Distribution options

The correct answer is: Accidental Death and Dismemberment coverage

An annuity contract primarily focuses on providing a stream of income, often during retirement, and includes specific components that cater to this purpose. Premium payment details outline how much the policyholder needs to pay into the annuity, while death benefits ensure that beneficiaries receive a payout in the event of the annuitant's passing before a certain period. Distribution options describe how and when the annuity payouts will be made, giving the policyholder flexibility on their income. Accidental Death and Dismemberment coverage, however, does not align with the core functions of an annuity. This type of coverage is usually found in life insurance policies, where it specifically addresses risks related to accidental death or serious injury. Therefore, it does not fit within the structure or intent of an annuity contract, which is designed to manage long-term income rather than provide indemnification for accidents. This distinction clarifies why this item is not typically found in an annuity contract.