An annuity contract typically includes all of the following features EXCEPT?

Annuities are designed as long-term investment vehicles focused on accumulating capital and providing income in retirement. They come with various features that serve different purposes, such as tax advantages and payout options.

The feature of favorable capital gain taxation on payouts is not characteristic of annuities. When payouts are made from an annuity, they are generally taxed as ordinary income rather than capital gains. This taxation structure means that while the investments within an annuity can grow tax-deferred, the distributions are taxed based on the individual's income tax bracket at the time of withdrawal. Therefore, this makes the statement about favorable capital gain taxation incorrect in the context of annuity contracts.

In contrast, annuities offer death benefits during accumulation to ensure that beneficiaries may receive a payout if the annuitant passes away before the annuity payments begin. They also feature tax-deferred accumulation, meaning that the growth of the investment within the annuity is not taxed until funds are withdrawn, leading to potentially significant growth over time. Additionally, annuities provide multiple payout options, allowing the annuitant to select how they wish to receive their funds, whether as a lump sum, over a specified period, or as lifetime income. Thus, these features reflect the core benefits and