Which statement describes Single Premium?

Which statement describes Single Premium?

• A. A lump-sum payment is paid into a savings plan.
• B. Premiums are paid into the contract on a quarterly basis.
• C. Single Premium: A lump-sum payment is made into an annuity.
• D. Monthly premiums are required for the term.

Answer: (C)

Single Premium means funding a contract with one lump-sum payment rather than ongoing installments. The statement that best fits this idea is that a lump-sum payment is made into an annuity. Paying once upfront to fund the contract is the defining feature, and the annuity can then distribute payments later (immediate vs. deferred). The other options describe periodic premiums (quarterly or monthly) or a lump-sum into a savings plan, which aren’t what single premium denotes in the context of annuities.

Single Premium means funding a contract with one lump-sum payment rather than ongoing installments. The statement that best fits this idea is that a lump-sum payment is made into an annuity. Paying once upfront to fund the contract is the defining feature, and the annuity can then distribute payments later (immediate vs. deferred). The other options describe periodic premiums (quarterly or monthly) or a lump-sum into a savings plan, which aren’t what single premium denotes in the context of annuities.