What policy is a savings instrument designed to first accumulate funds and then systematically liquidate the funds?
A. Term life.
B. Deferred annuity.
C. Mortgage insurance
D. Disability income insurance.
Answer (2)
The correct answer is B. A deferred annuity is designed to first accumulate funds and then systematically distribute those funds over time, especially during retirement. It stands apart from options like term life, mortgage insurance, and disability income insurance, which do not serve this purpose.
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A deferred annuity is a savings instrument that first accumulates funds and then systematically liquidates those funds over time, typically during retirement. Unlike term life, mortgage insurance, and disability income insurance, a deferred annuity allows for tax-deferred growth and eventual income payments. This makes it a suitable choice for long-term saving and income strategy. ;
