Questions: What is the basic function of an annuity? A. The guarantee of a specific sum of money to a designated beneficiary upon the death of the insured B. The accumulation of funds to pay for life insurance premiums during retirement years C. The protection against loss of income due to partial or total disability D. The systematic liquidation of accumulated funds Submit

What is the basic function of an annuity? A. The guarantee of a specific sum of money to a designated beneficiary upon the death of the insured B. The accumulation of funds to pay for life insurance premiums during retirement years C. The protection against loss of income due to partial or total disability D. The systematic liquidation of accumulated funds Submit
Transcript text: What is the basic function of an annuity? A. The guarantee of a specific sum of money to a designated beneficiary upon the death of the insured B. The accumulation of funds to pay for life insurance premiums during retirement years C. The protection against loss of income due to partial or total disability D. The systematic liquidation of accumulated funds Submit
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Solution

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Answer

The answer is D. The systematic liquidation of accumulated funds

Explanation
Option A: The guarantee of a specific sum of money to a designated beneficiary upon the death of the insured

This option describes the basic function of life insurance, not an annuity. Life insurance provides a death benefit to beneficiaries upon the insured's death.

Option B: The accumulation of funds to pay for life insurance premiums during retirement years

This option does not accurately describe the primary function of an annuity. Annuities are not specifically designed to accumulate funds for paying life insurance premiums.

Option C: The protection against loss of income due to partial or total disability

This option describes the function of disability insurance, which provides income replacement in the event of a disability, not an annuity.

Option D: The systematic liquidation of accumulated funds

This option correctly describes the basic function of an annuity. An annuity is a financial product that provides a stream of payments to the holder at regular intervals, typically used for retirement income. It systematically liquidates the accumulated funds over time.

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