The correct answer is C. Accumulation and Payout phases.
A deferred annuity is an insurance contract that provides income payments in the future. The two distinct phases of a deferred annuity are the accumulation phase and the payout phase.
The accumulation phase is the period of time during which you make payments into the annuity. During this time, your money is invested and grows tax-deferred. You can choose to make payments monthly, quarterly, annually, or even one lump sum.
The payout phase is the period of time when you start receiving income from the annuity. You can choose to start receiving income payments immediately or at a later date. You can also choose to receive payments for a certain number of years or for the rest of your life.
There are many different types of annuities available, so it is important to choose one that meets your needs and goals. You should consult with a financial advisor to determine if an annuity is right for you.
Here is a brief explanation of each option:
- A. Waiting and Starting phases: This option is incorrect because there is no such thing as a “waiting phase” in a deferred annuity. The accumulation phase begins as soon as you make your first payment.
- B. Loading and Unloading phases: This option is incorrect because there is no such thing as a “loading phase” or an “unloading phase” in a deferred annuity.
- C. Accumulation and Payout phases: This option is correct because the accumulation phase is the period of time during which you make payments into the annuity and the payout phase is the period of time when you start receiving income from the annuity.
- D. Commutation and Continuation phases: This option is incorrect because there is no such thing as a “commutation phase” or a “continuation phase” in a deferred annuity.