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1.
When you invest in a variable annuity, your funds go into the insurance company's general account.
False. In contrast to a fixed annuity, in which your funds are limited to the general account of the insurance company, variable annuities make available separate account investments in the stock, bond, and/or money markets.
2.
With annuities, mortality risk benefits _______.
Both. Annuitants trade the risk of dying before collecting full value for higher payments and possibly collecting more than full value if they live long.
3.
When you annuitize, you are paying into your annuity account.
False. When you annuitize, you begin receiving income from your annuity.
4.
A period certain annuity pays income _______.
For a fixed term. A period certain annuity pays income for a fixed term, even if the annuitant doesnt survive the term.
5.
Unlike with fixed annuities, your payments from a variable annuity are not guaranteed.
True. They depend in part on the performance of the underlying investments in the separate accounts to which you contribute.