retirement outline

Variable annuity fees

·        Death benefit-has an impact on cost

·        Length of time annuity must be held-has an impact on cost

·        Sales charges <8.5% of total payments, paid for with accumulation units in separate account

·        Insurance co. pays broker/dealer commission for selling variable annuity

·        Insurance co. gets spent $ back through separate account fees

·        Level load sales charges, annuitant pays sales charges over the time the $ is invested in annuity

·        Contingent deferred sales charge, penalty charge for ending variable annuity contract early

·        Sales charge period, needs to expire for customers to end contract without penalty

·        Front end sales charge, can’t be>8.5%, investment $ - sales charge is placed in separate account

Variable annuity

·        Security

·        Insurance product

·        Must be registered

·        RR must be licensed in state of sale

Variable annuity contract

·        Security

·        Register with SEC

·        Separate account-register as security

·        Investment Company Act of 1940-separate account must register

·        RR must have Series7 or Series6

The people who sell variable annuities must be registered with which of the following:

·        The state-salesman

·        FINRA-salesman

·        Separate account: state & SEC