Income Intermediate: Deferred Annuities

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
All of the following are benefits of deferred annuities except _______.
Choose wisely. There is only one correct answer.
Easy access to capital. Easy access to capital is not a benefit of deferred annuities, where surrender fees and tax penalties can affect early withdrawals.
2.
The person who receives the benefits of an annuity is the _______.
Choose wisely. There is only one correct answer.
Annuitant. While the annuitant and the owner may be the same person, and some kinds of annuities make payments to other beneficiaries, "annuitant" refers to the primary individual who receives the benefits of an annuity.
3.
An annuity that allows you to shelter some of your current income from taxes is called a _______.
Choose wisely. There is only one correct answer.
Qualified annuity. A qualified annuity, based on the assets of a qualified retirement plan such as a 401(k) or 403(b), allows you to shelter some of your current income from taxes.
4.
An annuity that delays payments until some point in the future is called a(n) _______.
Choose wisely. There is only one correct answer.
Deferred annuity. A deferred annuity delays payments until some point in the future.
5.
A non-qualified annuity can be a good way to avoid all of the following except _______.
Choose wisely. There is only one correct answer.
Early withdrawal penalties. Unlike the other choices, early withdrawal penalties can't be avoided with deferred annuities (except, of course, by not withdrawing your funds prematurely!).