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Exam Series 6 All Questions

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Exam Series 6 topic 1 question 296 discussion

Actual exam question from FINRA's Series 6
Question #: 296
Topic #: 1
[All Series 6 Questions]

Mr. R. Retired recently turned 61 and has decided to annuitize a variable annuity contract in which he had been investing. When he does so:

  • A. he will have to pay a 10% penalty for annuitizing the contract before he turned 62 ½.
  • B. his accumulation units will be converted into a fixed number of annuity units.
  • C. the value of his annuity units becomes fixed.
  • D. Both B and C are true statements.
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Suggested Answer: B 🗳️
When Mr. R. Retired decides to annuitize his variable annuity contract at the age of 61, his accumulation units will be converted into a fixed number of annuity units. The value of these units will depend on the actual returns earned by the account and the actuarially-determined assumed interest rate; it is not fixed. Mr. Retired will not be subject to a 10% penalty since he is over 59 years old.
by lolojepu at April 6, 2025, 1:32 a.m.

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