A client of an IAR mentions that he has received a prospectus for a variable annuity, but does not really understand the product. It would be reasonable for the IAR to explain that a variable annuity offers an investor:

A client of an IAR mentions that he has received a prospectus for a variable annuity, but does not really understand the product. It would be reasonable for the IAR to explain that a variable annuity offers an investor:



A) a product very similar to a mutual fund, but with lower costs and expenses.

B) the insurance company's backing of the annuity' performance.

C) the opportunity to invest in equity securities on a tax-deferred basis.

D) lifetime income guaranteed never to drop below the initial rate.



Answer: C) the opportunity to invest in equity securities on a tax-deferred basis.


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