What is true about a variable annuity?
a variable annuity guarantees an earnings rate of return. a variable annuity does not guarantee an earnings rate of return. a variable annuity guarantees payments for life.
How does a variable annuity work?
A variable annuity is a contract between you and an insurance company, under which the insurer agrees to make periodic pay- ments to you, beginning either immediately or at some future date. You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments.
Which of the following characteristics of a variable annuity?
Which of the following is a characteristic of a variable annuity? Variable annuities involve underlying equity investments in a separate account. How does an indexed annuity differ from a fixed annuity? An immediate annuity has a single premium.
What is the difference between a fixed annuity and a variable annuity?
A fixed annuity guarantees payment of a set amount for the term of the agreement. It can’t go down (or up). A variable annuity fluctuates with the returns on the mutual funds it is invested in. Its value can go up (or down).
Which of the following statements is true about a variable annuity contract?
Which statement is TRUE regarding variable annuity contracts? The best answer is D. In a variable annuity contract, the principal amount is never guaranteed. The principal value may increase or decrease, depending on the performance of the separate account.
What happens when a variable annuity matures?
Once your contract has matured, you can choose to keep your money in the annuity. You won’t receive any checks from the life insurance company. That is, unless you opt to withdraw money on your own or start your income payments according to a definitive withdrawal schedule set by the insurer.
What is group variable annuity?
What is a group variable annuity? A group variable annuity contract is a vehicle for companies that offer 401(k) and other retirement plans. These contracts are offered by insurance companies and are alternatives to mutual fund plan providers.
How are the variable annuities regulated quizlet?
Because the purchaser bears the investment risk in a variable annuity contract, these are defined by the SEC as a non-exempt security that must be registered and sold with a prospectus. Because these are structured as participating unit trusts, variable annuities are regulated under the Investment Company Act of 1940.
Which of the following features applies to a variable annuity but not to a mutual fund?
Which of the following features applies to a variable annuity, but not to a mutual fund? For investors, one of the key benefits of a variable annuity is tax-deferred growth. Mutual funds do not have this feature.
What is the difference between variable fixed and fixed indexed annuities?
A fixed annuity offers security while a variable annuity comes with a higher level of risk. The biggest difference between fixed annuities and fixed indexed annuities is how the insurance providers calculate interest. A fixed annuity offers a guaranteed interest rate for a specific amount of time.
Which of the following is a distinguishing feature between fixed and variable annuities?
Which of the following is a distinguishing feature between fixed and variable annuities? -Variable annuity principal and earnings are not guaranteed by the insurer. -That’s correct! One of the primary differences between fixed and variable annuities is how each product’s premiums are invested and how the funds grow.
Which statement is true regarding variable annuity contracts quizlet?