______ ____ is an element of single premium annuity.

______ ____ is an element of single premium annuity.

• A. Lump-sum payment
• B. Monthly premium
• C. Variable rate
• D. Surrender charge

Answer: (A)

In a single premium annuity, funding is done with one upfront payment. The defining element is a lump-sum payment made at the start, after which no regular premiums are due. This contrasts with annuities funded by periodic payments, where a monthly or other regular premium is required. A variable rate describes how interest or investment returns are credited, not the funding method. A surrender charge is a potential early-withdrawal penalty, not the funding structure. So the lump-sum payment is the key element that characterizes a single premium annuity.

In a single premium annuity, funding is done with one upfront payment. The defining element is a lump-sum payment made at the start, after which no regular premiums are due. This contrasts with annuities funded by periodic payments, where a monthly or other regular premium is required. A variable rate describes how interest or investment returns are credited, not the funding method. A surrender charge is a potential early-withdrawal penalty, not the funding structure. So the lump-sum payment is the key element that characterizes a single premium annuity.