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What is the primary risk associated with annuities?
  • a)
    Credit risk
  • b)
    Market risk
  • c)
    Inflation risk
  • d)
    Liquidity risk
Correct answer is option 'D'. Can you explain this answer?
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What is the primary risk associated with annuities?a)Credit riskb)Mark...
Annuities are often criticized for their illiquidity. Deposits into annuity contracts are typically locked up for a period of time, known as the surrender period, during which the annuitant would incur a penalty if they try to access the funds. Surrender periods can last several years, making annuities less liquid compared to other investments.
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