Question 47

The annuitant may begin receiving payments after 1 month.

An immediate annuity funded with a single premium typically allows the annuitant to start receiving payments as soon as one month after the premium is paid.

A) 1 month.

This option is correct because immediate annuities are designed to provide payments shortly after the initial investment, usually within one month of the premium payment.

B) 15 months.

This option is incorrect as immediate annuities do not require a waiting period of 15 months before payments commence. Such a delay would not align with the nature of immediate annuities, which are intended for quick disbursement of funds.

C) 18 months.

This option is incorrect for the same reason as option B. An immediate annuity is not structured to delay payments for 18 months, as it is meant to provide income shortly after the investment.

D) 24 months.

This option is also incorrect. A 24-month waiting period is inconsistent with the definition of an immediate annuity, which is characterized by its prompt payment schedule.

Conclusion

The correct answer, 1 month, accurately reflects the purpose of an immediate annuity, which is to deliver payments soon after the premium is paid. All other options incorrectly suggest extended waiting periods, which are not applicable to this financial product.