Which of the following is another term for the accumulation period of an annuity?

• A. Distribution period
• B. Funding period
• C. Maturity period
• D. Amortization period

Answer: (B)

Verified step by step guidance

1. Understand the concept of an annuity: An annuity is a financial product that provides a series of payments made at equal intervals. It has two main phases: the accumulation period and the distribution period.
2. Define the accumulation period: This is the phase during which contributions or payments are made into the annuity. The goal is to grow the investment through contributions and potential earnings.
3. Compare the given options: The 'distribution period' refers to the phase when the annuity starts paying out to the annuitant. The 'maturity period' is not a standard term used in the context of annuities. The 'amortization period' typically refers to the time it takes to pay off a loan, not an annuity.
4. Identify the correct term: The 'funding period' is another term for the accumulation period, as it describes the time when funds are being contributed to the annuity.
5. Conclude: The correct answer is 'Funding period,' as it aligns with the definition of the accumulation period in an annuity.