Income Intermediate: Deferred Annuities

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1.
The person who receives the benefits of an annuity is the _______.
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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.
2.
All of the following are benefits of deferred annuities except _______.
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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.
3.
An annuity that makes payments at a guaranteed level is a(n) _______.
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Fixed annuity. A fixed annuity is an annuity that makes payments at a guaranteed level.
4.
A non-qualified annuity can be a good way to avoid all of the following except _______.
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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!).
5.
You must pay taxes on investment earnings that build in your annuity account.
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False. Your earnings in a deferred annuity build on a tax-deferred basis. You pay no tax on them until you receive them as a payout.