During the accumulation phase of a variable annuity, the owner's payments purchase:
Explanation
In the accumulation phase of a variable annuity, contributions buy accumulation units in the separate account, and the value of those units fluctuates with the performance of the underlying investments, so the owner bears the investment risk. A guaranteed fixed dollar amount describes a fixed annuity. Annuity units are used during the payout (annuitization) phase, not accumulation. The owner is not buying the insurer's stock. Accumulation units measure the growing value before payout begins.
This topic, taught in full in the California Life & Health Insurance Producer Exam guide. California Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
Practice all 716 questions free — no signup required.
Own the complete California Life & Health Insurance Producer Exam guide — PDF + EPUB, $19.99 →
Related questions on this topic
- An annuity primarily protects an individual against the risk of:
- A flexible-premium annuity is always a:
- In a fixed annuity, the premiums are held in the insurer's:
- During the payout phase of a variable annuity, the number of annuity units is generally fixed, yet the payment amount varies because:
- An equity-indexed (fixed indexed) annuity protects the owner against index losses by providing:
- In an indexed annuity, the 'participation rate' determines:
Last reviewed: · editorial process