Question

1. a fixed annuity can be used to fund a qualified plan; a variable annuity cannot.

○ a. true
○ b. false

1. what is the primary difference between fixed and variable annuities?

○ a. the frequency of the products premium payments
○ b. the option for annuitization
○ c. the ways in which their funds are invested for growth
○ d. provisions for death benefits

1. \using capital to purchase income\ defines which of the following?

a. annuitization
b. asset allocation
c. tax deferral
d. market timing

Explanation:

1. Both fixed and variable annuities are eligible to fund qualified retirement plans, so the statement is false.
2. Fixed annuities invest in low-risk, fixed-income vehicles, while variable annuities invest in market-based sub-accounts; their core difference is fund investment methods.
3. Annuitization is the process of converting a lump sum of capital into a stream of regular income payments, matching the given definition.

Answer:

1. b. False
2. c. the ways in which their funds are invested for growth
3. a. annuitization