What are the features of a variable annuity?
Variable Annuities\n\n However, a typical variable annuity offers three basic features not commonly found in mutual funds: tax-deferred treatment of earnings; a death benefit; and. annuity payout options that can provide guaranteed income for life.
Which of the following is a feature of variable annuity quizlet?
The one feature listed that IS true of a generic variable annuity is the tax advantage. Variable annuities allow tax-deferral in relation to investments until the product is annuitized and annuity payments begin.
Which of the following features applies to a variable annuity but not to a mutual fund?
Although variable annuities offer investment features similar in many respects to mutual funds, a typical variable annuity offers three basic features not commonly found in mutual funds: Tax-deferred treatment of earnings; A death benefit; and. Annuity payout options that can provide guaranteed income for life.
Which of the following statements are true about variable annuities?
Which statements are TRUE about variable annuities? The best answer is C. There is no tax deduction for contributions made to a variable annuity contract. The major advantage is the tax-deferred build-up of earnings in the separate account.
How do variable annuities work?
Third, variable annuities let you receive periodic income payments for a specified period or the rest of your life (or the life of your spouse). This process of turning your investment into a stream of periodic income payments is known as annuitization.
Why are variable annuities considered riskier than fixed annuity?
They are riskier then fixed annuities as there is no assurance of returns being generated. If there is a withdrawal then any capital gains are taxed as ordinary income. Withdrawals made prior to the age of 59 ½ may be subject to a 10% tax penalty.
What are the different types of annuities?
The most popular type of variable annuity is a deferred annuity. Often used for retirement planning purposes, it is meant to provide a regular (monthly, quarterly, annual) income stream, starting at some point in the future. There are also immediate annuities, which begin paying income right away.