Types of Policies
A retiree makes one annuity purchase payment and wants income payments to begin within the next year. Which classification applies?
Answer and explanation
Answer: A. An immediate annuity is purchased with a single payment and typically begins income payments within one year. A deferred annuity postpones income while value accumulates, and the life-insurance choices are not annuity classifications.Source: SEC — Investor.gov Annuities — What kinds of annuities are there?
More types of policies questions
- How do premiums behave over time in a typical decreasing term life policy?
- How does a life annuity with 10-year period certain settlement option protect beneficiaries?
- How does the death benefit of an increasing term rider or policy change over time?
- How does the premium for a joint life (first-to-die) policy compare to buying two separate individual policies of the same face amount?
- How is interest credited to cash values in an interest-sensitive whole life policy?
- How is single-premium whole life ordinarily funded?
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