Types Of life Policies: Pt 2

Which of the following is a feature of a variable annuity?

Benefit payment amounts are not guaranteed. Under a variable annuity, the issuing insurance company does not guarantee a minimum interest rate or the benefit payment amounts. The annuitant's payments into the annuity are invested in the insurer's separate account. Agents selling variable annuities are required to have a securities license in addition to their life agent's license.

agent selling variable annuities must be registered with

FINRA because variable annuities are considered to be securities, a person must be registered with the FINRA (formerly NASD) &hold a securities license in addition to a life agents license in order to sell variable annuities

The death benefit under the Universal Life Option B

Gradually increases each year by the amount that the cash value increases. Under Option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases.

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Option B Under Option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any point in time, the total death benefit will always be equal to the face amount of the policy plus the current amount of cash value.

Which of the following is TRUE regarding variable annuities? A person selling variable annuities is required to have only a life agent's license. B The annuitant assumes the risks on investment. C The funds are invested in the company's general account. D The company guarantees a minimum interest rate.

The annuitant assumes the risks on investment. The payments that the annuitant invests into the variable annuity are invested in the insurer's separate account. The separate account under many annuities provides the annuitant with a dozen or more investment options ranging from "money market funds" to "growth stock funds" to "precious metal funds". Therefore, the annuitant assumes the risk of the investment.