Annuities are not classified on the basis of –

A. How purchased

B. How often paid

C. When annuity begins

D. Profits/Bonus

Answer: Option D

Solution(By Examveda Team)

Annuities are not classified on the basis of Profits/Bonus. Annuities are classified according to the nature of the payment and the duration of time for payment. If, however, the investment has fared poorly, the size of the payments decreases. A straight annuity is a contract by an insurance company to make variable payments at monthly or yearly intervals.