FPDA stands for Flexible Premium Deferred Annuity. Which statement best describes it?

FPDA stands for Flexible Premium Deferred Annuity. Which statement best describes it?

• A. a deferred annuity purchased with a series of payments, which may be irregular as to amount or timing
• B. an annuity that pays a fixed monthly amount immediately
• C. an annuity funded by a single lump sum only
• D. a life insurance policy with a value separate from the general account

Answer: (A)

Flexible Premium Deferred Annuity is a contract that lets you fund the annuity with payments that can vary in both amount and timing, rather than a single fixed payment. The “deferred” part means you accumulate value now and start receiving payments later, when you annuitize. This description fits a product where you contribute a series of payments—possibly irregular—before the payout begins. By contrast, an immediate annuity starts payments right away and usually involves a fixed schedule, a single-premium annuity is funded by one lump sum, and a life insurance policy is a different product whose primary purpose is protection, not deferring annuity payments.

Flexible Premium Deferred Annuity is a contract that lets you fund the annuity with payments that can vary in both amount and timing, rather than a single fixed payment. The “deferred” part means you accumulate value now and start receiving payments later, when you annuitize. This description fits a product where you contribute a series of payments—possibly irregular—before the payout begins. By contrast, an immediate annuity starts payments right away and usually involves a fixed schedule, a single-premium annuity is funded by one lump sum, and a life insurance policy is a different product whose primary purpose is protection, not deferring annuity payments.