Q801
Annuities are not classified on the basis of –
A.
How purchased
B.
How often paid
C.
When annuity begins
D.
Profits/Bonus
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Annuities are not classified on the basis of Profits/Bonus. Annuities are classified according to the nature of the payment and the duration of time for payment. If, however, the investment has fared poorly, the size of the payments decreases. A straight annuity is a contract by an insurance company to make variable payments at monthly or yearly intervals.