A Flexible Premium Deferred Annuity (FPDA) is characterized by which features?

A Flexible Premium Deferred Annuity (FPDA) is characterized by which features?

• A. Contributions fixed at regular, insurer-determined intervals; withdrawals begin after 1 year
• B. Contributions at intervals and amounts chosen by the saver; withdrawals begin after 1 year
• C. Contributions must be fixed yearly; withdrawals begin immediately
• D. Contributions are made only by the insurer; withdrawals begin after 5 years

Answer: (B)

A Flexible Premium Deferred Annuity lets you control how much and when you pay, rather than sticking to a fixed premium schedule set by the insurer. The “deferred” aspect means that money sits in the contract and grows, with withdrawals not starting until after a deferral period, typically one year or more. So the best match is that contributions can occur at intervals and in amounts chosen by the saver, and withdrawals begin after one year. The other descriptions describe fixed, insurer-determined payments, or immediate withdrawals, or funding solely by the insurer, which don’t fit FPDA.

A Flexible Premium Deferred Annuity lets you control how much and when you pay, rather than sticking to a fixed premium schedule set by the insurer. The “deferred” aspect means that money sits in the contract and grows, with withdrawals not starting until after a deferral period, typically one year or more.

So the best match is that contributions can occur at intervals and in amounts chosen by the saver, and withdrawals begin after one year. The other descriptions describe fixed, insurer-determined payments, or immediate withdrawals, or funding solely by the insurer, which don’t fit FPDA.