Question

What is considered to be a characteristic of an immediate annuity?

a) Fixed payments over a specific period
b) Payments that begin immediately
c) Variable interest rates
d) Payments that can be deferred

Answer 1

An immediate annuity is a type of pension plan that provides fixed payments that begin immediately. It does not have variable interest rates or the option to defer payments.

Step-by-step explanation:

An immediate annuity is a financial product that provides fixed payments that begin immediately to the annuitant. It is a type of pension plan where an individual gives a lump sum of money to an insurance company, and in return, they receive regular payments for a specified period. Unlike some other types of annuities, immediate annuities do not have variable interest rates or the option to defer payments.