Types of Policies
How are accumulation units converted in a variable annuity when the contract owner chooses to annuitize?
Answer and explanation
Answer: A. At annuitization, accumulation units convert to a fixed number of annuity units whose dollar value varies with subaccount investment returns.Source: SEC Investor Bulletin — Variable Annuities — PDF page 3, Annuity Units
More types of policies questions
- Under a fixed indexed annuity’s basic index-crediting structure, what interest is added for an index term with a negative result?
- Under IRC § 7702 corridor rules, what must an insurer do if cash value growth in a universal life policy threatens to breach the statutory life insurance definition ratio?
- What benchmark rate is used in variable annuity payout calculations to determine whether monthly annuity payment amounts increase or decrease?
- What benefit does a joint and survivor annuity payout option provide to two annuitants (such as a married couple)?
- What characterizes a deferred annuity contract during its accumulation phase?
- What defines the death benefit and premium structure of a standard level term life policy?
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