Variable Annuities
Variable annuities are considered securities because:
Variable = security (investment risk). Fixed = insurance product (no investment risk).
Complete Analysis & Legal Rationale
Variable annuities are securities because the return varies based on the performance of underlying sub-accounts (similar to mutual funds). This investment risk makes them securities requiring registration.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Fixed interest rates are features of FIXED annuities, which are insurance products.
Matches the verified teaching point in the explanation.
Annuities are issued by insurance companies, not the government.
Death benefits exist in both fixed and variable products - not what makes them securities.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.