Which of the following is true regarding an annuity?

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Which of the following is true regarding an annuity?

Which of the following is true regarding an annuity?

The correct answer is c) An annuity due is an equal stream of cash flows paid or received at the beginning of each period.

What is annuity account statement?

An annuity statement is an annual or quarterly update on the cash value and investment performance of your deferred annuity.

What are the characteristics of a deferred annuity?

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

What is deferred income annuity?

A deferred income annuity allows you to put aside money now that will provide you with a steady income stream later. You pay a lump sum or ongoing payments in exchange for guaranteed future income. Once your money is invested, you typically can’t access it until retirement.

What is the main difference between immediate and deferred annuities?

An immediate annuity begins paying out as soon as the buyer makes a lump-sum payment to the insurer. A deferred annuity begins payments on a future date set by the buyer.

Which two terms are associated directly with the way an annuity is funded?

Which two terms are associated directly with the way an annuity is funded? Annuities are characterized by how they can be paid for: either a single payment (lump sum) or through periodic payments in which the premiums are paid in installments over a period of time.

What is the difference between immediate and deferred annuity?

What are the benefits of a deferred annuity?

The advantages of a deferred annuity An annuity allows you to save on a tax-deferred basis, meaning that earnings in the account are not taxed until they’re withdrawn. And if you contribute to the account with after-tax money, any of your contributions come out with no additional income tax liability.

What do you need to know about a deferred annuity?

BREAKING DOWN ‘Deferred Annuity’. A deferred annuity is a contract between an individual and a life insurance company in which funds are exchanged for a promise to provide a competitive interest rate with a minimum interest rate guarantee.

How is a surrender charge determined on a deferred annuity?

If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined? Someone won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?

Which is statement incorrect about a tax-sheltered annuity?

Sylvia purchased an annuity for $100,000 from the proceeds of an inheritance. No further payments are permitted and the income stream begins in 15 years. This contract is a (n) Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)?

When does interest income for a flexible premium deferred annuity get reported?

When does interest income for a flexible premium deferred annuity get reported for federal income taxes? a. Never b. After the principal has been exhausted c. Upon receiving distributions from the contract

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