Which statement describes a flexible premium annuity?

• A. Premiums are fixed for life
• B. Premiums can vary year to year
• C. Premiums are paid in lump sum only
• D. Premiums are reduced after first year

Answer: (B)

In a flexible premium annuity, you control the amount and timing of payments, so premiums can change from year to year. This means you’re not locked into one fixed payment each year—you can pay more when you have extra income or pay less or skip a year (within any minimums the contract requires). That variability is the defining feature.

So the statement that premiums can vary year to year is describing a flexible premium annuity. The other ideas describe different structures: a fixed premium annuity has a set, level payment; a single (lump-sum) premium is a single payment upfront; and premiums reduced after the first year isn’t how a flexible premium plan is described.