Florida Life and Health Insurance License Practice Test

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Which type of annuity pays benefits based on units rather than specific dollar amounts?

Fixed annuity
Immediate annuity
Variable annuity
Indexed annuity

The correct answer is: Variable annuity

Variable annuities pay benefits based on units rather than specific dollar amounts. This is different from fixed and indexed annuities, which have predetermined payout amounts. An immediate annuity is a type of fixed or variable annuity that starts paying out immediately after the initial investment, but the payout is still based on specified dollar amounts. Therefore, option C is the correct answer for this question.