New York Insurance Exam Practice Question
Which of the following is a feature of a deferred annuity?
Correct Answer: B
Rationale: A deferred annuity is designed to provide income at a future date, making option B accurate, as payments commence after a specified deferral period. Option A is incorrect since immediate payments characterize immediate annuities, not deferred ones. Option C is misleading; deferred annuities actually allow for tax-deferred growth, meaning taxes on earnings are postponed until withdrawal. Lastly, option D is not universally true; while some deferred annuities may involve higher risk investments, many offer conservative options, making this statement overly broad.
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