Single Premium Deferred Annuity (SPDA) is described as which of the following?

Single Premium Deferred Annuity (SPDA) is described as which of the following?

• A. Monthly premiums for 10 years.
• B. Immediate withdrawals after purchase.
• C. A flexible premium policy with no minimum withdrawal schedule.
• D. A single premium lump sum with withdrawals beginning 1 year or more in the future.

Answer: (D)

A Single Premium Deferred Annuity is an annuity funded with one lump sum and designed to start paying out after a deferral period. The single premium means you contribute just once, not through ongoing premiums. The deferred aspect means withdrawals don’t begin immediately—typically they start after one year or more, allowing the account to grow tax-deferred during the accumulation phase. This combination fits the description of a single premium lump sum with withdrawals beginning in the future. The other descriptions don’t fit because they imply ongoing premiums, immediate withdrawals, or a flexible premium structure.

A Single Premium Deferred Annuity is an annuity funded with one lump sum and designed to start paying out after a deferral period. The single premium means you contribute just once, not through ongoing premiums. The deferred aspect means withdrawals don’t begin immediately—typically they start after one year or more, allowing the account to grow tax-deferred during the accumulation phase. This combination fits the description of a single premium lump sum with withdrawals beginning in the future. The other descriptions don’t fit because they imply ongoing premiums, immediate withdrawals, or a flexible premium structure.