Which of the following are major differences between accumulation units and annuity units in the separate ...

By Investopedia Staff AAA
Q:

Which of the following are major differences between accumulation units and annuity units in the separate account of a variable annuity?
I. There are a variable number of accumulation units
II. Accumulation units grow tax-deferred
III. When the contract holder converts accumulation units to annuity units, he/she has lost control of the account
IV. The AIR only applies to annuity units
a) I, II
b) II, IV
c) I, III, IV
d) I, II, III, IV

A:

The correct answer is d.
All of these are differences between accumulation and annuity units. In addition, there are a fixed number of annuity units to be cashed in each month.


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