Annuities✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Which statement is generally correct regarding a deferred annuity after the surrender charge period has ended?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Ownership of a deferred annuity does not force annuitization. After the surrender charge period, the owner may choose to take systematic withdrawals, surrender the contract for its cash value, or elect to annuitize and begin a guaranteed income stream. This flexibility is one of the product's attractions: tax-deferred accumulation continues until the owner decides how and when to receive the money.
Why the other options are wrong
- B) Payments beginning within 12 months is the definition of an immediate annuity, not a deferred annuity.
- C) The cash value remains an asset of the owner; failing to annuitize does not forfeit the accumulated value.
- D) Nonqualified annuities are not subject to a mandatory annuitization age, and RMD rules apply to qualified accounts, not to nonqualified annuity ownership.
Memory hook
A deferred annuity is a maybe-later product: annuitize only when you actually want the paycheck.