Which of the following statements is (are)true with respect to a fixed indexed annuity?
I.The maximum percentage gain is usually capped.
II.There is no downside protection against loss of principal if the annuity is held to term.

Question

Quizplus · Accepted Answer

I is true because fixed indexed annuities have a cap on the maximum percentage gain, which means the policyholder will not receive the full benefit of any market gains beyond the cap.
II is false because fixed indexed annuities offer downside protection against loss of principal, even if the annuity is held to term. The policyholder's principal is protected from market losses, although there may be surrender charges or other fees for early withdrawals.

Which of the Following Statements Is (Are)true with Respect to a Fixed