Which type of annuity allows investments over time and defers benefit payments until a date selected by the annuitant?

• A. Deferred annuity
• B. Periodic Payment Deferred Annuity
• C. Immediate annuity
• D. Accumulation unit annuity

Answer: (B)

The key idea here is how the contract is funded and when payouts begin. A deferred annuity is designed so you fund it now and start taking payments later. If the contract specifies that you make payments on a schedule (periodically) during the accumulation phase and then defer benefits until a future date you choose, that fits the Periodic Payment Deferred Annuity exactly. It combines ongoing investments over time with a payout that starts at a date selected by the annuitant.

A plain deferred annuity could be funded in various ways and doesn’t necessarily imply periodic contributions. An immediate annuity starts payments right away, not later. An accumulation unit annuity focuses on how values are tracked and allocated during accumulation, not specifically on the timing of deferral.