Group Life & AnnuitiesQuestion 111 of 716
Which statement best describes a single premium annuity?
a.It is funded by one lump-sum payment
b.It is funded by both an initial premium and required annual top-ups
c.It cannot accept any premiums after the first year of the contract
d.It is funded by ongoing flexible payments over many years
Explanation
A single premium annuity is purchased with one lump-sum payment. A flexible premium annuity, by contrast, allows the owner to make additional contributions over time within contract limits.
Law Reference: Cal. Ins. Code §10127.13This topic, taught in full in the California Life & Health Insurance Producer Exam guide. California Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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Related questions on this topic
- In a fixed annuity, who bears the investment risk on the funds the owner has paid in?
- Which license, in addition to a California life-only license, must a producer hold to sell a variable annuity?
- An indexed annuity has a 0% floor and a 6% cap. If the linked index returns negative 12% in a contract year, what interest is credited to the owner's account that year?
- By definition, a single premium immediate annuity (SPIA) must begin making payouts to the annuitant no later than:
- Which annuity settlement option produces the largest periodic payment for a given premium, all else equal?
- A married couple wants lifetime income that continues to whichever spouse lives longer. Which annuity settlement option is the most common fit?
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PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)