Washington Life Producer Practice Exam

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Prepare for the Washington Life Producer Exam with flashcards and multiple-choice questions. Detailed explanations and hints accompany each question to foster your understanding and readiness for exam day!

Practice this question and more.

Which of the following statements about a flexible premium deferred annuity is true?

Premiums must remain constant each year
Payments start immediately after purchase
Premium payments can vary from year to year
It guarantees a fixed return

The correct answer is: Premium payments can vary from year to year

A flexible premium deferred annuity allows policyholders the flexibility to vary their premium payments over time. This means that individuals can adjust the amount they contribute based on their financial situation from year to year. It accommodates changes in income or financial needs, making this type of annuity appealing for those who prefer not to commit to rigid premium amounts. In contrast, certain features of the other statements clarify why they do not apply to flexible premium deferred annuities. For instance, these annuities do not require constant premiums, thus providing financial flexibility. Additionally, payments from a flexible premium deferred annuity do not begin immediately; instead, they are deferred until a designated period or retirement age. Lastly, while some annuities may guarantee a fixed return, flexible premium deferred annuities can offer variable returns based on the investments made, which do not necessarily assure a fixed rate.