Question

Which one of the following statements concerning annuities offered by insurers is not true?

a. interest on annuities is not taxed until the investor receives the payments.
b. annuity payments may be fixed or variable.
c. annuity contributions are not capped by the irs.
d. annuities can be deferred or immediate.
e. annuity payments must cease upon the policyholder's death

Answer 1

Annuity payments do not necessarily cease upon the policyholder's death. Therefore, the correct option is E.

Step-by-step explanation:

The statement that is not true concerning annuities offered by insurers is option e: annuity payments must cease upon the policyholder's death.

Annuities are a type of financial product offered by insurers that provide a regular stream of income to the policyholder during retirement. Unlike pensions, which may cease upon the policyholder's death, annuity payments can continue to be paid out to beneficiaries or heirs after the death of the policyholder.

For example, if an individual purchases a joint-and-survivor annuity, the payments will continue to be made to the surviving spouse or another designated beneficiary even after the policyholder passes away. This feature ensures that annuity payments can provide financial support to loved ones even after the policyholder's death.