An Immediate Life Annuity Offers All of the Following Benefits

question 27

Multiple Choice

An immediate life annuity offers all of the following benefits EXCEPT

• A)Immediate annuity payments are entirely exempt from federal income tax.
• B)Simplicity for the purchaser as he or she does not have to manage investment funds.
• C)Security for the purchaser as stable lifetime income that cannot be outlived is provided.
• D)The principal is safe as the funds are guaranteed by the assets of the insurer.

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Definitions:

Variance Inflation Factor

A metric that quantifies the severity of multicollinearity in regression analysis.

Correlation Matrix

A table showing the correlation coefficients between variables, indicating the level and direction of the relationship between them.

Multiple Regression Model

A statistical technique that uses several explanatory variables to predict the outcome of a response variable.

Insignificant Variables

Variables in a statistical model that do not significantly influence the outcome of the model.