A deferred annuity involves delayed payments that start at a future date, often after a certain accumulation period, providing income in later years, especially suitable for retirement planning.

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

A

In a deferred annuity, upon payment of a lump sum as investment, a stream of fixed payments immediately starts
B

In a deferred annuity, the payments are deferred till a surplus is generated for payments
In a deferred annuity, a fixed or variable stream of payments begins at a specified time in future

Correct answer
D

In a deferred annuity, the payments are deferred till a specified amount is accumulated as corpus

Why this is the answer

Deferred annuities delay income payments until a future date, often post-retirement, providing steady income later.

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