Question

What is true about deferred annuity ?

• A. It is an annuity when the payments are made at the end of payment period.
• B. It is an annuity when the payments are made at the beginning of payment period.
• C. It is an annuity when the payments are made at the middle of payment period.
• D. None of the above

Answer 1

The correct option is A It is an annuity when the payments are made at the end of payment period.

$\Rightarrow$ True statement about deferred annuity is,

$-Itisanannuitywhenthepaymentaremadeattheendofpaymentperiod.$

$\Rightarrow$ A deferred annuity is an insurance contract designed for long-term savings.

$\Rightarrow$ Unlike an immediate annuity, which starts annual or monthly payments almost immediately, investors can delay payments from a deferred annuity indefinitely. During that time, any earnings in the account are tax-deferred.