When does an immediate annuity begin making payments?

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Study for the Louisiana Series 103 – Life, Health, and Accident or Sickness Insurance Exam. Familiarize yourself with key concepts through engaging questions and explanations. Prepare effectively for your exam!

Multiple Choice

When does an immediate annuity begin making payments?

Explanation:
Immediate annuities start paying out right after they’re funded. The key point is there’s little to no deferral period—the payments begin once the premium is paid into the contract, commonly with a single premium in the case of a single-premium immediate annuity. The other steps in the process—contract delivery, policy issuance, or naming a beneficiary—don’t determine when payments start. They’re about administration or designation, not the timing of the payout.

Immediate annuities start paying out right after they’re funded. The key point is there’s little to no deferral period—the payments begin once the premium is paid into the contract, commonly with a single premium in the case of a single-premium immediate annuity. The other steps in the process—contract delivery, policy issuance, or naming a beneficiary—don’t determine when payments start. They’re about administration or designation, not the timing of the payout.

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