PSI Life Exam Practice Test

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the PSI Life Exam. Study with detailed flashcards and multiple choice questions, complete with hints and explanations. Excel in your forthcoming test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What type of annuities are purchased with a series of premium payments that vary year to year?

Fixed premium deferred annuities
Flexible premium deferred annuities
Immediate annuities
Variable annuities

The correct answer is: Flexible premium deferred annuities

Flexible premium deferred annuities are designed to allow policyholders to make varying premium payments over time. This flexibility enables individuals to adjust their contributions based on their financial situation or investment goals. Unlike fixed premium deferred annuities, which require the same payment amount at set intervals, flexible premium options accommodate changes such as increases or decreases in income or investment strategy. This feature makes flexible premium deferred annuities particularly appealing for those who may not want to commit to a fixed payment schedule, providing a way to build savings or retirement income that reflects changing circumstances. The ability to change the premium amount annually is a significant advantage for individuals seeking both flexibility and the potential for tax-deferred growth until they withdraw funds.