Question

29 austin is purchasing a registered annuity contract that provides investment returns. his agent mentions that austin will have to fund the contract and make choices with regard to the term of his investment. the agent also suggests a maturity date based on austins time horizon for the investment. based on this information, which of the following type of annuity is austin purchasing? v2tqaufptkztnzbrthlazw5rnm1qut09 a. a joint and last survivor annuity b. a prescribed life annuity c. a payout annuity d. an accumulation annuity v2tqaufptkztnzbrthlazw5rnm1qut09

Explanation:

To determine the annuity type, we analyze each option:

• Option a: Joint and last survivor annuity focuses on multiple lives (e.g., a couple), not on funding and choosing an investment term. Eliminate.
• Option b: Prescribed life annuity is about income based on life expectancy, not about funding and choosing an investment term with a maturity date. Eliminate.
• Option c: Payout annuity is for distributing funds, not funding and choosing a term. Eliminate.
• Option d: Accumulation annuity involves funding the contract, choosing the investment term, and has a maturity date based on the time horizon, matching the description.

Answer:

d. An accumulation annuity