Chapter 5- Annuities And Retirement Plans Flashcards
What is a fixed annuity and what must the company offering one have?
It’s an insurance product that offers a guaranteed fixed return,
The company must have an insurance license
What type of Securities can a variable annuity invest in, and what licenses must the company have in order to offer a variable annuity?
A variable annuity can invest in stocks, bonds, or mutual fund shares and must have a securities license and an insurance license
What is the difference between direct and indirect investment for variable annuities?
If the variable annuity is invested directly in stocks or bonds it is recognized as an open-end investment company ( mutual fund) and must get in an investment advisor
If the variable annuity invests in mutual fund then it is considered to be a unit investment trust
