Which statement is TRUE regarding a flexible premium annuity?

A flexible premium annuity allows the purchaser to vary the amount of premium payments made at different times. This feature is beneficial as it provides the flexibility to adjust contributions based on financial circumstances or investment strategy. The purchaser is not limited to fixed payment amounts or a specific payment schedule, which distinguishes flexible premium annuities from fixed premium annuities that require equal contributions at regular intervals.

In contrast, other statements suggest restrictions that do not apply to flexible premium annuities. Removing the requirement for equal or annual payments, for instance, allows individuals the convenience to manage their contributions to align with their current financial status. This adaptability is a significant advantage, making it easier for investors to respond to changing financial needs or opportunities over time.