SIE practice questionhardVariable Annuities
A key risk associated with variable annuities, but not with fixed annuities, is:
- AFixed periodic payments regardless of investment performance
- BThe client's investment return is not guaranteed and may fluctuate✓ Correct answer
- CPayments are insured by the FDIC
- DPrincipal is guaranteed by the insurance company
Explanation
Why B — The client's investment return is not guaranteed and may fluctuate
A is correct; variable annuities’ results depend on market performance. B is fixed annuity feature. C and D are untrue for variable annuities.
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