Series 6 – Investment Company and Variable Contract Products Representation Qualification Exam Series 6 – Investment Company and Variable Contract Products Representation Qualification Exam Variable Annuities & Variable Life Products

Question 1

A variable annuity contract is considered a security because:

Accepted Answer

Its value fluctuates based on the performance of underlying investment subaccounts

Answer

It is issued by an insurance company

Answer

It provides a guaranteed death benefit

Answer

It is tax-deferred

Question 2

Which of the following is a key difference between the accumulation units and annuity units in a variable annuity?

Accepted Answer

Accumulation units represent the investor's interest during the savings phase; annuity units determine payment amounts during the payout phase

Answer

Accumulation units are purchased during the payout phase; annuity units during the accumulation phase

Answer

Accumulation units have a fixed value; annuity units fluctuate

Answer

Annuity units can be surrendered for cash; accumulation units cannot

Question 3

An assumed interest rate (AIR) in a variable annuity payout is best described as:

Accepted Answer

A benchmark rate used to determine whether annuity payments increase, decrease, or stay the same

Answer

The guaranteed minimum rate of return on subaccount investments

Answer

The rate used to calculate surrender charges

Answer

The maximum rate of return the insurer will credit to the account

Question 4

Which suitability consideration is MOST important when recommending a variable annuity to a client?

Accepted Answer

Whether the client has a long investment time horizon and can tolerate market risk

Answer

Whether the client has a checking account with the same insurer

Answer

Whether the client already owns a term life insurance policy

Answer

Whether the client prefers equity funds over bond funds

Question 5

The free-look period in a variable annuity contract allows the purchaser to:

Accepted Answer

Cancel the contract and receive a full refund within a specified number of days after delivery

Answer

Invest in any subaccount without incurring management fees for the first year

Answer

Surrender the contract without paying a contingent deferred sales charge

Answer

Transfer assets among subaccounts at no cost for a limited period

Question 6

Which of the following variable annuity charges compensates the insurer for providing the death benefit guarantee?

Accepted Answer

Mortality and expense (M&E) risk charge

Answer

Management fee

Answer

Administrative fee

Answer

Surrender charge