Tennessee Life Producer Practice Exam

What is the minimum quarterly payment requirement for Q's annuity?

1. Less than $250

2. Exactly $250

3. $250 or more

4. $500

The correct answer is: $250 or more

The correct choice indicates that the minimum quarterly payment requirement for Q's annuity is $250 or more. This means that policyholders must contribute at least this amount for their annuity to remain in good standing and to benefit from the contract's terms. Annuities often have specified minimum payment levels to ensure that the investment is sufficiently funded to meet future obligations, such as retirement payments or death benefits. By requiring payments of $250 or more, the annuity ensures that there is adequate capital to generate the expected returns and provide the benefits promised in the policy. This minimum threshold is crucial for maintaining the financial stability of the annuity over its duration. Understanding minimum payment requirements is essential for anyone considering or managing an annuity, as it impacts the overall growth and availability of funds over time.