PSI Ohio Insurance Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the Ohio Insurance Test. Prepare with flashcards and multiple choice questions, each question accompanied by hints and explanations. Excel in your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is a primary use of an annuity?

To fund a child's education
To provide retirement income
To cover medical expenses
To pay for life insurance premiums

The correct answer is: To provide retirement income

The primary use of an annuity is to provide retirement income. Annuities are financial products designed to help individuals accumulate savings during their working years and then convert those savings into a stream of income during retirement. They can be structured in various ways, such as immediate or deferred, fixed or variable, to ensure that retirees have a reliable income source for their living expenses, which is particularly crucial given the decreasing reliance on traditional pensions in recent years. While annuities can be used for purposes like funding a child's education or covering medical expenses, these are secondary uses. Their main function aligns closely with the need for long-term financial security and income stability in retirement years. Annuities help mitigate the risk of outliving one's savings, thus emphasizing their role as a retirement income vehicle.