Who did what with annuities? Take the quiz

Allen Wastler

By Allen Wastler
Allen Wastler is a former financial journalist with over 30-years of experience, including time at CNBC, CNN, and Knight-Ridder Newspapers.
Posted on Jun 4, 2020

Admittedly, annuities may not be the most gripping subject matter at a cocktail party. Yet, the idea of guaranteed income for life in the face of growing longevity concerns is an important subject, and one that should be considered by most everyone thinking about retirement.

So here is a little quiz pointing up some of the interesting facts from the history of annuities. (Scroll down for answers or use the jump links)

1. Which Founding Father established an annuity in his will for two colonial cities?

  • Alexander Hamilton
  • Thomas Jefferson
  • John Hancock
  • Ben Franklin

Answer

2. “I may take risks in life, but I will never risk my money; I use annuities, and I never have to worry about my money.” Who said that?

  • Lt. Col. James Doolittle
  • Babe Ruth
  • Gen. George Patton
  • Amelia Earhart

Answer

3. Where did annuities first originate?

  • The Han Dynasty
  • Ancient Greece
  • The Roman Empire
  • Ancient Egypt

Answer

4. When did annuities first become publicly available in the United States?

  • 1759
  • 1812
  • 1851
  • 1905

Answer

5. What famous composer was persuaded to remain in Vienna with the promise of an annuity?

  • Ludwig van Beethoven
  • Wolfgang Amadeus Mozart
  • Johannes Brahms
  • Franz Joseph Haydn

Answer

Of course, beyond history, annuities have important and useful functions in today’s world as well. You can find out more about them here.

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Answer 1

Benjamin Franklin bequeathed Philadelphia and Boston a total of 2,000 pounds sterling in his will. But, he stipulated that the bulk of the money could not be drawn on for 100 years, and the rest could not be distributed for 200 years. Growing over time, the money added up to several million dollars for each city when finally distributed.

          Learn more from MassMutual: Types of annuities and how they work

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Answer 2

Babe Ruth is credited with the quote. During his prime playing years, the Sultan of Swat put a substantial amount of his salary into annuities — ones with specific growth and future income guarantees. He apparently did so at the urging of a manager concerned about his hard-charging lifestyle. The annuity purchases became an important source of income for his family once he retired.

          Learn more from MassMutual: When is the right time to buy an annuity?

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Answer 3

The origin of annuities is generally traced to the Roman Empire, where an annuity system was a standard way of repaying soldiers for years of service. Indeed, the term annuity is derived from the Latin “annua,” which literally meant “annual payment” and generally described the practice of paying an up-front lump sum of some sort — be it money, goods, or service — in exchange for a stream of payments back at a later date. However, some archeological evidence suggests an Egyptian prince may have purchased something like an annuity in 1100–1700 B.C. Still, Rome typically gets the overall credit.

          Learn more from MassMutual: Does an annuity fit your retirement goals?

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Answer 4

The correct answer to the specific question is 1812, but all the dates are significant. 1759 is when the Presbyterian Church set up an annuity program to benefit retiring pastors. In 1812, the Pennsylvania Company for Insurances on Lives and Granting Annuities was founded and began offering annuities to the general public. MassMutual was founded in 1851 (and issued its first annuity in 1917). And in 1905, Andrew Carnegie founded the Carnegie Teachers Pension Fund, which would transform in 1918 into the Teacher’s Insurance Annuity Association, now known as TIAA.

          Learn more from MassMutual: Financial protection tactics as you near retirement

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Answer 5

Napoleon’s brother, King Jerome Bonaparte of Westphalia, offered Beethoven an attractive position at his court. The Archduke of Vienna along with two local princes made a counteroffer in the form of a life-long annuity contract, saying that “one needs to be free of worries to fully dedicate oneself to a cause and create grand and outstanding works.” Beethoven accepted the counteroffer.

Discover more from MassMutual …

Why complaints about annuities are often misplaced

Life insurance history quiz

4 key moments in MassMutual history

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The information provided is not written or intended as specific tax or legal advice. MassMutual and its subsidiaries, employees, and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of MassMutual.