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Variable annuities are securities and under FINRA's jurisdiction. Annuities are often products investors consider when they plan for retirementso it pays to understand them. They also are often marketed as tax-deferred savings products.
Fixed annuities are considered exempt from the registration and prospectus requirements of the Securities Act of 1933. Thus, the Securities and Exchange Commission (SEC) does not have jurisdiction over or regulate fixed annuities.
Suitability Information Gathered by an InsurerAge.Annual income.Financial situation and needs, including the financial resources you're using to fund the annuity.Financial experience.Financial goals and objectives.Intended use of the annuity.Financial time horizon.More items...
A fixed annuity is an insurance product, not a security, because the insurance company must credit the annuity holder's account with the specified interest rate for the contractually-stipulated time period, regardless of market fluctuations in actual interest rates.
Annuity is a contract in between the insurance company (i.e., the party granting the annuity) and the annuitant (receiver of annuity) whereby in consideration of the payment of a purchase price by the annuitant, the other party (i.e., the insurance company) undertakes to make a yearly or annual payment to the annuitant
Fixed annuities are not securities and are not regulated by the SEC.
An annuity consideration or premium is the money an individual pays to an insurance company to fund an annuity or receive a stream of annuity payments. An annuity consideration may be made as a lump sum or as a series of payments, often referred to as contributions.
1 Indexed annuities also are subject to state insurance regulation. Indexed annuities that are not regulated by the SEC include minimum guarantees that limit and in many cases eliminate the potential for investment losses.
Anyone selling variable annuities must carry a securities license. Learn from the experts and get our 101-level guide, Annuities Explained, delivered to your inbox for free.
Are Annuities High or Low Risk? Compared with investments, such as stocks and bonds, annuities are low risk. Their fixed rates and guaranteed income make them safe in the right circumstances.