New York Insurance Exam Practice Question
Which of the following is a feature of a variable annuity?
Correct Answer: C
Rationale: A variable annuity allows investors to allocate funds among various investment options, typically including stocks and bonds, which are tied to market performance. This feature enables the potential for higher returns based on market fluctuations.
Option A, guaranteed payments, pertains more to fixed annuities, which promise a steady income. Option B is incorrect as the investment risk is primarily borne by the investor, not the insurer. Lastly, option D is misleading; variable annuities do offer tax-deferred growth, allowing investments to grow without immediate tax implications.
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