Which of the following statements regarding non-qualified annuities is CORRECT?
A) Because taxes on earnings are deferred, all withdrawal proceeds will be subject to income tax when received.
B) It is possible to start distributions from an annuity before age 59 ½ without incurring tax penalties.
C) Since only insurance companies issue variable annuities, they are not considered securities.
D) The exclusion ratio applies accumulation units only.
Answer: B) It is possible to start distributions from an annuity before age 59 ½ without incurring tax penalties.