CARD Q051
A buyer contributes to an annuity for future retirement income. Income payments have not begun. Which phase is this?
- Annuitization
- Claim settlement
- Accumulation
- Life settlement
Accumulation
Accumulation is the funding and growth phase. Annuitization converts value to an income stream under an elected payout option.
Why each choice is right or wrong
A. Annuitization
Incorrect. Annuitization converts value into scheduled income; that has not occurred here.
B. Claim settlement
Incorrect. A claim settlement is not the stated funding phase.
C. Accumulation
Correct. Accumulation is the funding and growth phase. Annuitization converts value to an income stream under an elected payout option.
D. Life settlement
Incorrect. A life settlement involves selling a life policy, not accumulating annuity funds.
Review the related terms
Use these lessons to revisit the concepts and try additional practice questions.