QQuestionBusiness Management
QuestionBusiness Management
A variable annuity has which of the following characteristics?
A. Guaranteed rate of return during the accumulation period.
B. Investment risk assumed by the insurance company.
C. Fixed payment amount during the payout period.
D. Investment risk assumed by the contract owner.
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Answer
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Step 1:Let's solve this step by step:
Step 2:: Understand Variable Annuities
A variable annuity is a type of insurance contract that allows individuals to invest money with the potential for growth through various investment options.
Step 3:: Analyze the Characteristics of Variable Annuities
- The key distinguishing feature of a variable annuity is that the contract owner bears the investment risk. - Unlike fixed annuities, the returns are not guaranteed and depend on the performance of underlying investment subaccounts.
Final Answer
Investment risk assumed by the contract owner. The key characteristic of a variable annuity is that the contract owner bears the investment risk, with returns fluctuating based on the performance of chosen investment subaccounts.
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