Utah Life Producer Practice Exam

The characteristic of variable annuities that stands out is investment choice flexibility. This means that policyholders have the ability to allocate their premiums among a variety of investment options, usually mutual funds or other investment vehicles. This flexibility allows individuals to tailor their investments based on their risk tolerance, investment goals, and market conditions. The performance of these investments directly affects the value of the annuity and the payouts received during retirement.

Fixed payouts during retirement would not apply to variable annuities, as they are characterized by payouts that can fluctuate based on the performance of the selected investments. Similarly, while variable annuities may offer certain guarantees under specific conditions, the overall income can be affected by market performance, meaning they do not guarantee income regardless of market conditions. Additionally, variable annuities typically come with various associated fees, such as management fees and surrender charges, making the option of no associated fees inaccurate in context.