84. In a deferred annuity, which event initiates benefit payments to the annuitant?
Answer: C
Benefit payments to the annuitant are initiated when the contract matures.
In a deferred annuity, the initiation of benefit payments occurs upon the maturation of the contract. This is the point at which the annuitant can begin receiving regular income from the annuity.
A) The contract is surrendered
Surrendering a deferred annuity means the annuitant chooses to withdraw their investment before the maturity date. While this may provide immediate funds, it does not initiate benefit payments in the form of structured income; rather, it results in a lump sum payout, which is not the same as receiving regular annuity benefits.
B) A cash refund is paid
A cash refund typically refers to a return of premiums paid into the annuity if the annuitant dies before the contract matures. This option does not pertain to the initiation of benefit payments and does not provide any regular income to the annuitant.
C) The contract matures
When the contract matures, it signifies that the accumulation phase has ended, and the annuitant can start receiving benefit payments. This is the correct answer, as it directly relates to the commencement of periodic payments based on the terms of the annuity contract.
D) The beneficiary dies
The death of a beneficiary does not trigger benefit payments to the annuitant; instead, it may affect the payout to the beneficiary or the beneficiaries of the annuity. This event is unrelated to the initiation of income payments to the annuitant.
Conclusion
The maturation of the contract is the definitive event that initiates benefit payments to the annuitant in a deferred annuity. Other options either pertain to withdrawals, refunds, or scenarios that do not directly result in regular income payments. Thus, option C stands out as the only correct choice in this context.