Group Life & AnnuitiesQuestion 108 of 315
In a fixed annuity, who bears the investment risk on the funds the owner has paid in?
a.The insurance company
b.The contract owner
c.The annuitant only
d.Both the owner and the annuitant equally
Explanation
A fixed annuity credits a declared current rate that is never less than the guaranteed minimum stated in the contract. The insurer bears the investment risk and must credit at least the minimum even if its own investments perform poorly.
Law Reference: Cal. Ins. Code §10168.25Practice all 315 questions free — no signup required.
Related questions on this topic
- Which federal agency has primary responsibility for enforcing ERISA's fiduciary, disclosure, and reporting rules for employer-sponsored benefit plans?
- An annuity is best described as protection against which risk?
- In an annuity contract, whose life is used to calculate the periodic payouts during the annuitization phase?
- Which license, in addition to a California life-only license, must a producer hold to sell a variable annuity?
- An indexed annuity has a 0% floor and a 6% cap. If the linked index returns negative 12% in a contract year, what interest is credited to the owner's account that year?
- Which statement best describes a single premium annuity?
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against California Life & Health Insurance License Exam · How we review