Certified Employee Benefit Specialist (CEBS) Retirement Plans Associate (RPA) 2 Practice Exam

A deferred life annuity is characterized by the start of its income payments occurring at a future date, rather than immediately. This future payment timeline allows individuals to accumulate funds or investment growth prior to receiving their payouts, which can be advantageous in terms of planning for retirement income as it allows more time for contributions to grow. Typically, upon reaching the predetermined date, the individual then begins receiving regular income payments for the rest of their life.

In contrast, an immediate life annuity begins paying out income right after the annuity is purchased, which reflects the immediate availability of funds for the annuitant. The other choices relate to features of annuities in general or specific types, but they don't specifically highlight the fundamental distinction regarding the timing of payments, which is the essence of what differentiates a deferred life annuity from an immediate life annuity.