South Carolina Life Insurance Practice Exam

Disable ads (and more) with a membership for a one time $4.99 payment

Prepare for the South Carolina Life Insurance Exam. Utilize flashcards and multiple choice questions with detailed explanations to enhance your understanding. Ace your exam!

Practice this question and more.

What type of annuity can be purchased with a single premium?

Deferred annuity
Immediate annuity
Variable annuity
Joint life annuity

The correct answer is: Joint life annuity

The type of annuity that can be purchased with a single premium is an immediate annuity. This type of annuity is designed to start making payments to the annuitant shortly after a lump sum premium is paid. With a single premium immediate annuity, the individual pays a one-time upfront amount and begins receiving income payments, often within a month, which distinguishes it from deferred annuities, which do not start payments until a later date. Immediate annuities provide a reliable income stream for individuals, often used in retirement planning, as they convert the single premium directly into a series of periodic payments. The structure of immediate annuities makes them particularly appealing for those who want to start receiving income right away, providing financial security during retirement.