SIE practice questionmediumVariable Annuities
Which of the following is a unique risk of variable annuities compared to fixed annuities?
- AInterest rate risk is eliminated
- BInvestment risk is borne by the contract owner✓ Correct answer
- CPayments are guaranteed by the U.S. government
- DDeath benefits are always higher than premiums paid
Explanation
Why B — Investment risk is borne by the contract owner
A is correct; in variable annuities, the investor bears investment risk. B is false—in fact, the investor has investment risk. C is wrong as annuities are not government-guaranteed. D is inaccurate—death benefits vary by product.
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