Annuities
Who bears the investment risk in a variable annuity?
Answer and explanation
Answer: D. In a variable annuity the value follows the performance of the subaccounts the owner selects, so the owner carries the investment risk. That is the mirror of a fixed annuity, where the general account backs a guaranteed rate and the insurer carries the risk.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, who bears investment risk in a variable annuity
More annuities questions
- A contract holder elects to begin receiving income. Which phase has begun?
- A deferred annuity stops building value for future income and begins making scheduled income payments. Which phase has begun?
- A fixed annuity states a minimum rate and a current rate. What is the difference?
- A married couple wants annuity income to continue while either of them lives. Which option fits?
- A worker buys an annuity at age 45 and plans to begin income at age 65 after years of tax-deferred accumulation. Which classification best fits?
- An annuitant wants income for life but wants a minimum amount to reach heirs if she dies early. Which option fits?
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