Question

What is the key characteristic of a "defined benefit plan" in the context of pension plans?

a.

A fixed sum is invested and available at retirement age

b.

A fixed sum is paid regularly to a person

c.

Payouts depend on the investment performance of the fund

d.

It is offered only to high-income earners

Posted under IC38 Life Insurance Agent Exam

Answer: (b).A fixed sum is paid regularly to a person Explanation:In a "defined benefit plan" for pension, a fixed sum is paid regularly to a person, typically after their retirement.

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Q. What is the key characteristic of a "defined benefit plan" in the context of pension plans?
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