Question

An annuity owner is funding an annuity that will supplement her retirement because she does not know what effect inflation may have on her retirement dollars she would like a return that will equal the performance of the standard and poor 500 index she would likely purchase an
a.equity indexed annuityb.variable annuityc.flexible annuityd.immediate annuity

Answer 1

Answer:

The answer is a): Equity indexed annuity

Explanation:

When an annuity owner is funding an annuity that will supplement her retirement because she doesn’t know how inflation may affect her retirement dollars in the future, she would likely find equity-indexed annuities more appealing, and purchase it because it can give her the opportunity to earn minimum or get a higher return than what the stock performance or traditional fixed-rate annuities that the largest (500) companies in the United States’ stock exchange would be able to attract for her. In addition, she will be protected against possible downsides like unseen and unpredictable inflation rates.