Insurance-Based Products: Rapid Fire

What this video covers

• Who bears the investment risk in fixed annuities, variable annuities, and equity-indexed annuities, and why that single question determines Securities and Exchange Commission (SEC) registration
• Why equity-indexed annuities sound like securities but are not, due to the guaranteed floor that puts downside risk back on the insurance company
• The dual-license requirement for anyone selling variable annuities or variable universal life (VUL), since variable bridges both insurance and securities worlds
• Mortality and expense (M&E) charges of 1.25% to 1.50%, why they are unique to variable products, and how last in, first out (LIFO) taxation hurts early withdrawals
• The 10% Internal Revenue Service (IRS) early-withdrawal penalty before age 59 1/2, stacked on top of ordinary income tax, and how the death benefit guarantee evaporates at annuitization
• Why term life, whole life, and universal life are not securities, while variable life and VUL are, again following the subaccount risk rule
• How the payout ladder shrinks checks as guarantees grow, from life only (highest) down through period certain to joint and survivor 100% (lowest)