Arkansas Life and Health Insurance Practice Exam

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Prepare for the Arkansas Life and Health Insurance Exam. Utilize flashcards and multiple-choice questions with hints and explanations for each question. Get thoroughly ready for your certification test!

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Deferred annuities are normally purchased to defer ___________.

  1. Penalties on early withdrawals

  2. Premium payments

  3. Rider attachments

  4. Taxes on any policy earnings

The correct answer is: Penalties on early withdrawals

Deferred annuities are typically purchased to defer penalties on early withdrawals. This type of annuity allows the policyholder to postpone receiving payments until a later date, which may help them avoid penalties that could be incurred if they were to withdraw funds prematurely. By deferring withdrawals, individuals can potentially benefit from increased policy earnings over time.

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