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Multiple Choice
Which of the following is NOT typically funded by annuities?
A
Education savings plans
B
Structured settlement payments
C
Life insurance death benefits
D
Retirement income
Verified step by step guidance
1
Understand the concept of annuities: An annuity is a financial product that provides a series of payments made at regular intervals, typically used for retirement income, structured settlements, or education savings plans.
Analyze the options provided: Education savings plans, structured settlement payments, life insurance death benefits, and retirement income.
Recognize that annuities are designed to provide periodic payments over time, which aligns with funding education savings plans, structured settlement payments, and retirement income.
Consider life insurance death benefits: These are typically funded by life insurance policies, not annuities. Life insurance provides a lump sum payment to beneficiaries upon the policyholder's death, which is distinct from the periodic payment structure of annuities.
Conclude that life insurance death benefits are NOT typically funded by annuities, as they serve a different financial purpose compared to the other options listed.