Question

Which of the following statements regarding annuity settlement or payout options is NOT true?​

A) Annuities do not use the pooling technique to spread risk.
B) An owner may change the annuity date, the beneficiary, or the settlement option.
C) Once the payout period begins, the annuitant receives periodic payments.
D) The accumulation period is the period prior to the annuitization date.

Answer 1

Annuities do use the pooling technique to spread risk.

Step-by-step explanation:

The correct answer is A) Annuities do not use the pooling technique to spread risk. This statement is not true because one of the main characteristics of annuities is the pooling technique.

Annuities are financial products that use contributions from many individuals to create a pool of funds. This pool is then invested, and the returns are used to provide payments to the annuitants.