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1.
The earnings on variable annuities are taxed during the accumulation period.
False. The earnings on variable annuities are tax-deferred until payout.
2.
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.
3.
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.
4.
An annuity that pays you income as long as you live, but stops when you die, is a ________.
Life annuity. Life annuities pay the annuitant a regular income as long as he or she lives.
5.
Which of the following is not a characteristic investment account available with variable annuities?
General account. Stock, bond, and money market accounts are the "characteristic" separate accounts available with variable annuities.