Rory has purchased a product from an insurance company that requires the insurance company to pay him $5,000 each year, and he will continue to receive these payments until he dies. This series of payments is called
A)a portfolio.
B)a bond.
C)a dividend.
D)an annuity.

Question

Quizplus · Accepted Answer

An annuity is a financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees. In this case, the insurance company's agreement to pay Rory $5,000 each year for the rest of his life fits the definition of an annuity.

Rory Has Purchased a Product from an Insurance Company That