Annuities
What happens during the accumulation period of a deferred annuity?
Answer and explanation
Answer: A. The accumulation period is the time during which purchase payments go in and the contract value builds. Income payments belong to the annuity period that follows, and surrender and death benefit are events that end the contract rather than phases of it.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, accumulation versus annuity period
More annuities questions
- What risk does a life annuity protect the annuitant against?
- Where are the assets backing a fixed annuity held?
- Which payout option produces the largest periodic income for a given sum, and why?
- Who bears the investment risk in a variable annuity?
- Why do deferred annuities commonly carry surrender charges in the early years?
- Why might an annuity be used to accumulate funds for education?
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