Mrs. Anderson needs to invest the proceeds from her late husband's life insurance. She invests a portion of the money into an annuity. Since she is 62 and still working, she decides to purchase a single premium deferred annuity. She won't need an income for a few more years. What should the agent make sure Mrs. Anderson understands?
1) Since she only has a few more years before she retires, she should invest with the objective to make as much money as possible. Her time horizon is limited.
2) She will have to begin taking withdrawals within six months of receiving the proceeds.
3) She has a 30-day free look period in case she changes her mind.
4) As a life insurance product, future proceeds are tax-free.