variable annuity

variable annuities are considered to be securities regulated under investment company act of

1940

to sell variable annuities salesperson must be registered with

FINRA and state Insurance commission

fixed annuity account grows at a guaranteed rate

a fixed annuity is suitable for customer seeking preservation of capital

life annuity

a life annuity will cease when the person dies the period payment for life annuity will be more than the payment for period certain annuity

an annuity unit of a variable annuity contract is

account measure of the annuity amount to be received by the owner

accumulation unit of a variable annuity is a

accounting measure of the owner's interest in the separate account

build up in a variable annuity separate account during accumulation phase

all interest, dividends, and capital gains from the securities in all interest, dividends, and capital gains from the securities in the account are tax deferred

any loss is deductible as ordinary loss

but any portion of the loss due to the surrender fee is not deductible

Air in prospectus - assumed interest rate

conservative illustration of how much the contract holder will receive in payments if the seraph account grows at the air

purchaser of variable annuity bears these risks

legislative, interest rate, investment

purchaser of variable annuity does not have these risks

mortality risk and expense

rights of variable annuity owner

right to vote to change the spirit account investment objective right to vote for the board of trustees right to vote for the dissolution of the trust

life annuity with period certain

continue payments for a specified time period of the annuitant dies prematurely

distributions to mutual fund shareholders are taxable the year distribution is made

distributions to variable annuity holders are tax deferred

contributions to the separate account are not tax deductible

earnings in the separate account build tax deferred

variable annuity contracts

have the purchaser bear the investment risk are non-exempt securities

purchase and pay options for variable annuity

lump sump payment, immediate annuity lump sum payment, deferred annuity periodic payment, deferred annuity

true of variable annuities

must be registered with SEC must be sold with a prospectus are participating unit investment trust form of investment company are sold with a sales charge

growth in the separate account of a variable annuity is

not guaranteed as a minimum rate and not capped as to maximum rate

any surrender fee imposed is

not tax deductible --

variable annuity contract offers GMIB

optional feature of variable annuity contracts floor on the minimum rate that the separate account will earn

during accumulation phase

payments can be made but distributions cannot be made

death benefit

prior to annuitization the amount invested in the contract is returned to the beneficiary

air illustration using a 5% rate this means that

return can be less than 5%

payments into variable annuity contract are deposited to the company's

separate account

when variable annuity contract is annuitized

the number of annuity units is fixed the annuity unit value is variable

rollover permitted without tax due

variable annuity for variable annuity life insurance for a variable annuity life insurance for life insurance