Ron Liven is a retiree receiving a monthly annuity payment. This year his annuity payment is $4,000 per month. Last year, it was $3,700 per month, and the year before it was $3,500. Ron does NOT know what his payment will be NEXT year. What type of annuity does he have?

Question

Quizplus · Accepted Answer

Ron Liven's annuity payments are changing each year, which indicates that the amount he receives is not fixed. Since the payments are not consistent and he does not know what his payment will be next year, this suggests that his annuity is subject to varying factors such as investment performance or other variables, characteristic of a variable annuity. Fixed incremental increase, installment refund, and cash refund annuities do not typically involve unpredictable changes in payment amounts.

Ron Liven Is a Retiree Receiving a Monthly Annuity Payment