Investment VehiclesQuestion 84 of 100
A variable annuity's separate account value during the accumulation phase:
a.Fluctuates with the performance of the underlying investment subaccounts
b.Is guaranteed by the insurer at a fixed rate
c.Is insured by the FDIC
d.Cannot lose value
Explanation
In a variable annuity, contributions are allocated to subaccounts whose value rises and falls with market performance, so the investor bears the investment risk. Unlike a fixed annuity, there is no guaranteed accumulation rate. It is a security because of this investment risk.
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