FINRA-SERIES-6 Web TestEngine demo

Earnings on the contributions to a variable annuity are not taxed during the accumulation phase.

If an investor opts to make a random, partial, lump sum withdrawal, the entire amount of the withdrawal will be taxed as ordinary income to the investor.

If an investor opts to receive regular payments of a specific amount -i.e., annuities-part of each payment will be considered repayment of principal and will not be subject to taxation.

An investor who makes a withdrawal prior to having reached the age of 62 ½ will be subject to a 10% penalty on the withdrawal.