Variable Annuities
Which statement is true about annuity contracts?
Life-only annuity = highest payment (no guarantees). Joint survivor = lower payment (covers two lives).
Complete Analysis & Legal Rationale
The type of annuity selected (life only, life with period certain, joint and survivor, etc.) significantly affects payment amounts. A life-only annuity pays more per period than one with guarantees because the insurer takes on less risk.
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:
Nonqualified annuity earnings are taxed as ordinary income when distributed.
Matches the verified teaching point in the explanation.
Age and sex are key factors in determining annuity payments (actuarial calculations).
Multiple factors determine payments, not just investment returns.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA Series 7 outline.