Deferred Annuity is an annuity that starts sometime in the future. Which type is this?

Deferred Annuity is an annuity that starts sometime in the future. Which type is this?

• A. Immediate Annuity
• B. Deferred Annuity
• C. Flexible Annuity
• D. Lifetime Annuity

Answer: (B)

The key idea is when payments begin. A deferred annuity is designed so money is accumulated first and distributions don’t start until a future date you choose. That deferral—money growing in the contract before any payout begins—is what sets it apart. Immediate annuities, by contrast, start payments soon after purchase (typically within a year). Flexible premium relates to how premiums are paid rather than when payments begin. Lifetime describes how long the payments last (for life), not when they start. So, the type that fits “starts sometime in the future” is the deferred annuity.

The key idea is when payments begin. A deferred annuity is designed so money is accumulated first and distributions don’t start until a future date you choose. That deferral—money growing in the contract before any payout begins—is what sets it apart.

Immediate annuities, by contrast, start payments soon after purchase (typically within a year). Flexible premium relates to how premiums are paid rather than when payments begin. Lifetime describes how long the payments last (for life), not when they start.

So, the type that fits “starts sometime in the future” is the deferred annuity.