With a deferred annuity, how soon can the benefit payments begin?

Under Pennsylvania annuity standards and life insurance study materials, adeferred annuityis designed to postpone benefit payments until a future date selected by the contract owner. By definition, benefit payments under a deferred annuitycannot begin earlier than 12 months after the date of purchase. During the deferral period, premiums accumulate on a tax-deferred basis, allowing the annuity’s value to grow before distributions begin.

Pennsylvania licensing materials emphasize the distinction between immediate and deferred annuities. Immediate annuities begin payments within one year of purchase, while deferred annuities delay income beyond that one-year threshold. This distinction is critical for exam purposes and consumer understanding, as it directly affects retirement planning and income timing.

The incorrect options suggest benefit payments beginning within 6 or 12 months, which would classify the contract as an immediate annuity rather than a deferred annuity. Therefore, only“at least 12 months after date of purchase”correctly reflects the regulatory and contractual definition of a deferred annuity under Pennsylvania insurance rules.