New York Insurance Exam Practice Question
Which of the following is a characteristic of a fixed annuity?
Correct Answer: B
Rationale: A fixed annuity provides a guaranteed minimum interest rate, ensuring stability and predictability in returns, making option B accurate.
Option A is incorrect as fixed annuities offer stable payments, not variable ones tied to market performance. Option C misrepresents fixed annuities; they are designed to minimize investment risk, unlike variable annuities that may carry higher risks. Option D is also wrong, as fixed annuities do offer tax-deferred growth, allowing the investment to grow without immediate tax implications until withdrawals are made.
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