New Jersey Life Insurance Exam Practice Question
An immediate annuity is designed to make its first benefit payment to the annuitant typically
Correct Answer: D
Rationale: An immediate annuity begins making payments shortly after purchase, typically within one month. This option accurately reflects the annuity's structure, providing immediate income to the annuitant.
Option A is incorrect as immediate annuities do not require a lengthy accumulation period; they start payments right away. Option B is misleading since immediate annuities provide regular payments rather than a lump sum. Option C is also incorrect because cash surrender values pertain to different types of annuities and do not affect the timing of benefit payments for immediate annuities.
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