Annuities


Variable Annuities

What is a Variable Annuity?

A variable annuity is a contract between an individual and an insurance company in which the individual will make payments to the insurance company in return for periodic payments from the insurer.  The annuitant purchasing the annuity is given several options as to how to invest their purchase payments; thus, variable annuities differ from traditional annuities as their rate of growth is not fixed, but variable.  The annuity’s variable growth rate allows for substantial gains as well as losses.

What are the licensing requirements to sell Variable Annuities?

The contract owners of variable annuities bear risk due to the annuity’s variable rate of growth; because of this fact, the U.S. Securities and Exchange Commission views variable annuities as a security rather than a life insurance product.  The requirements to obtain the variable annuities line of authority for resident and non-resident producers are as follows:

Resident Producers

  • Applicant must be registered with the Financial Industry Regulatory Authority (FINRA).
  • Applicant must have successfully completed FINRA Series 6 or 7 examinations.
  • Applicant must pass the Michigan variable annuities examination.
  • NOTE:  Pre-licensing education for VA line of authority is not required; however, continuing education requirements under MCL 500.1204c do apply to the VA line of authority

Non-resident Producers

  • Applicant must hold a variable annuities/variable life line of authority in his or her home state.
  • Applicant must be registered with the Financial Industry Regulatory Authority (FINRA).
  • Applicant must have successfully completed FINRA Series 6 or 7 examinations.
  • Applicant must pass the Michigan variable annuities examination if the applicant has not passed an exam in their home state.

Fixed Annuities

What is a Fixed Annuity?

A fixed annuity is a contract between an individual and an insurance company in which the insurer guarantees a fixed growth rate for the individual’s account.  In addition, the periodic payments made by the insurer to the individual are guaranteed at a fixed dollar amount.  Payments are made to the annuitant over the term of the contract (this is usually life or some other specified date).

What are the licensing requirements to sell Fixed Annuities?

Unlike variable annuities, fixed annuities do not bear any risk.  Fixed annuities are viewed as life insurance products and thus, an individual wishing to sell fixed annuities must possess a Producer Life Insurance License in good standing.