38. Annuities purchased with a series of premium payments that vary year to year are called
Answer: A
Flexible premium deferred annuities are purchased with varying premium payments.
Annuities that are funded through a series of premium payments that can vary from year to year are classified as flexible premium deferred annuities.
A) flexible premium deferred annuities.
This option is correct because flexible premium deferred annuities allow the policyholder to make premium payments that vary in amount and timing, which aligns with the definition provided in the question.
B) level premium deferred annuities.
This option is incorrect as level premium deferred annuities require consistent premium payments that remain the same throughout the investment period, which does not accommodate variations in payments.
C) yearly premium insurance annuities.
This option is incorrect since yearly premium insurance annuities typically refer to policies with fixed annual premiums, lacking the flexibility to vary payments from year to year as described in the question.
D) flexible premium insurance annuities.
This option is also incorrect because while it mentions flexibility, it does not specify that the payments are deferred. "Insurance annuities" generally imply immediate benefits rather than deferred ones, which is a key distinction.
Conclusion
Flexible premium deferred annuities are distinctly characterized by the capability for varying premium payments, making option A the only correct choice. All other options fail to meet the criteria set by the question, either by implying fixed payments or failing to specify the deferred nature of the annuity.