Question

"A new customer opens an account and buys a variable annuity contract, investing $20,000. 90 days later, the client calls and tells the representative that he wants to surrender the contract. The representative explains that this is not a good idea, since there will be a high surrender fee of 8% imposed. The client tells the representative that he does not care about the surrender fee and that he wants the net proceeds wired to an account at a bank in another country. What should the representative do?"

Answer 1

The insurance representative should first verify that the call was actually received from the customer that opened the annuity account.

Then, she should follow due process established by her insurance company. After these, she can then comply with the customer's instructions.

Step-by-step explanation:

Investopedia.com defines a variable annuity as the "type of annuity contract, the value of which can vary based on the performance of an underlying portfolio of mutual funds." This means that variable annuities differ from fixed annuities. Fixed annuities provide a specific and guaranteed return.