Oklahoma Life Producer Practice Exam

A Variable Annuity Life Only payout option guarantees what?

1. A fixed monthly payment regardless of market conditions

2. A guaranteed number of annuity units each month for life

3. The ability to change the payout structure at will

4. A predictable growth rate in payment amounts

The correct answer is: A guaranteed number of annuity units each month for life

The correct answer is that a Variable Annuity Life Only payout option guarantees a guaranteed number of annuity units each month for life. This option specifically means that once the payout period begins, the owner will receive a set number of annuity units that are converted to cash payments based on the performance of the investment choices within the variable annuity. What makes this guarantee significant is that while the value of each unit may fluctuate with market conditions, the total number of units remains consistent. This provides a level of income certainty for the lifetime of the annuitant, regardless of how the investment portfolio performs over time. This can offer both security and potential for growth, as the actual dollar amount received can vary depending on market fluctuations. The other choices, while related to various aspects of annuities, do not accurately reflect the nature of this specific payout. A fixed monthly payment regardless of market conditions describes a fixed annuity rather than a variable one. The ability to change the payout structure at will would relate to something like a flexible withdrawal option, which is not a feature of the life-only payout structure. Lastly, a predictable growth rate in payment amounts does not apply to variable annuities, as their payments are inherently subject to market performance and can