Annuities
Where are the assets backing a fixed annuity held?
Answer and explanation
Answer: C. A fixed annuity is backed by the insurer's general account, which is why the insurer carries the investment risk and guarantees the rate. Separate accounts back variable contracts, and neither a personal trust nor a bank custodial account is where the assets sit.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, fixed annuities and general account
More annuities questions
- What does a guaranteed minimum withdrawal benefit provide?
- What does a nonforfeiture provision give an annuity owner who stops paying?
- What does selling a variable annuity require beyond a New York life license?
- What happens during the accumulation period of a deferred annuity?
- What is the tax feature that makes annuities attractive for retirement saving?
- What risk does a life annuity protect the annuitant against?
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