Final answer:
Variable annuities and equity-indexed annuities do not have very similar fees; this statement is false. Variable annuities typically come with higher fees, whereas equity-indexed annuities often have lower fees due to their different structures and investment strategies.
Step-by-step explanation:
The statement that variable annuities and equity-indexed annuities have very similar fees is false. Variable annuities typically have higher fees because they offer a range of investment options that can be managed actively, leading to management fees, administration fees, and other charges such as mortality and expense risk charges.
Furthermore, variable annuities may have surrender charges and fees for additional features like income riders or death benefits.
In contrast, equity-indexed annuities often have lower fees compared to variable annuities, because they are typically not invested directly in securities but are instead linked to a market index.
This type of annuity often has more limited investment options and may offer different types of fee structures which could include participation rates, caps, and spreads; however, they usually do not incur the same level of management fees as variable annuities. Both types of annuities have complexities and costs that should be fully understood before purchasing.