Which one of the following is correct?

A. Amount of annuity payable is directly proportional to Length of annuity

B. Amount of annuity payable is inversely proportional to Length of annuity

C. Both have no correlation

D. I do not want to attempt this question

Answer: Option B

Solution(By Examveda Team)

Amount of annuity payable is inversely proportional to Length of annuity. The growth of the annuity’s value and/or the benefits paid may be fixed at a dollar amount or by an interest rate, or they may grow by a specified formula. The growth of the annuity’s value and/or the benefits paid does not depend directly or entirely on the performance of the investments the insurance company makes to support the annuity.