Which premium option is defined as a lump-sum payment into an annuity?

Which premium option is defined as a lump-sum payment into an annuity?

• A. Periodic Premium.
• B. Single Premium: A lump-sum payment is made into an annuity.
• C. Flexible Premium.
• D. Guaranteed Premium.

Answer: (B)

The option described as a lump-sum payment into an annuity is the single premium. This means you fund the annuity with one upfront payment rather than paying over time. That one-time amount establishes the contract and can influence the starting value and potential payout. In contrast, periodic premium involves regular payments over time, and flexible premium allows changing payment amounts or timing. The term guaranteed premium isn’t the standard way to describe a lump-sum funding option for an annuity.

The option described as a lump-sum payment into an annuity is the single premium. This means you fund the annuity with one upfront payment rather than paying over time. That one-time amount establishes the contract and can influence the starting value and potential payout.

In contrast, periodic premium involves regular payments over time, and flexible premium allows changing payment amounts or timing. The term guaranteed premium isn’t the standard way to describe a lump-sum funding option for an annuity.