Recommendations & StrategiesQuestion 59 of 100
A client in the accumulation phase of a variable annuity is concerned about outliving assets in retirement. Annuitization with a life payout option primarily addresses:
a.Interest-rate risk
b.Longevity risk
c.Currency risk
d.Reinvestment risk
Explanation
A life-contingent annuity payout provides income for as long as the annuitant lives, directly addressing longevity risk, the danger of outliving one's assets. It transfers that risk to the insurer. It does not specifically hedge interest-rate or currency risk.
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