Income Intermediate: Variable Annuities

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1.
A period certain annuity pays income _______.
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For a fixed term. A period certain annuity pays income for a fixed term, even if the annuitant doesnt survive the term.
2.
The earnings on variable annuities are taxed during the accumulation period.
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False. The earnings on variable annuities are tax-deferred until payout.
3.
With annuities, mortality risk benefits _______.
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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.
4.
Unlike with fixed annuities, your payments from a variable annuity are not guaranteed.
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True. They depend in part on the performance of the underlying investments in the separate accounts to which you contribute.
5.
Which of the following is a benefit of variable annuities?
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Better potential return. Variable annuities feature neither guaranteed returns nor fixed payments.