PSI Ohio Insurance Practice Exam 2025 – All-in-One Guide to Exam Success

A flexible premium annuity allows the purchaser the option to vary the amount of each premium payment. This flexibility means that the policyholder can choose to pay different amounts at different times, which is particularly advantageous for individuals whose incomes may fluctuate or who want to invest variable amounts based on their financial situation.

In contrast, a fixed amount payment system restricts contributions to set amounts at predetermined intervals, limiting the flexibility that many investors need or desire. Additionally, while some annuities may provide guaranteed fixed returns, this characteristic does not apply universally to flexible premium annuities, as they can also be linked to market performance, which introduces variable returns. Therefore, the assertion regarding fixed returns is not inherently true for all flexible premium annuities. Similarly, while some investments may have protections against market fluctuations, flexible premium annuities can also be exposed to market performance depending on their structure. This combination of features makes option B the true statement regarding flexible premium annuities.