Arkansas Life and Health Insurance Practice Exam

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Which of the following generally involves periodic payments starting at a specified date for the rest of the annuitant's life?

Deferred Annuity
Immediate Annuity
Lump-Sum Distribution
Variable Annuity

The correct answer is: Deferred Annuity

A deferred annuity involves payments that begin at a future date, not immediately. An immediate annuity, on the other hand, starts periodic payments soon after the contract is purchased, usually within a year. Lump-sum distribution refers to taking the entire amount out at once, which is not periodic payments. Variable annuities involve investment risks and do not guarantee fixed payments for life. Therefore, the correct option is a deferred annuity, where payments start at a specified date for the rest of the annuitant's life.