🛡️ Series 6 Insurance Product Reference – Complete Guide to Insurance Products for the Series 6 Exam

Preparing for the Series 6 exam requires a solid understanding of insurance-based investment products — especially those that are classified as securities. This comprehensive reference guide outlines the key features, regulations, risks, and suitability considerations of the most common insurance products covered on the exam.

Use this as a high-impact study resource to reinforce your product knowledge and improve exam performance.

📘 Variable Annuities

🔍 Overview:

Variable annuities are long-term retirement contracts that allow investors to allocate premiums into separate accounts with underlying investments such as mutual funds. Unlike fixed annuities, payouts are not guaranteed and will fluctuate based on market performance.

🔑 Key Features:

• Tax-deferred growth
• Subaccount investment options
• Mortality and expense (M&E) fees
• Optional riders for guaranteed benefits

📜 Regulatory Classification:

• Registered as securities
• Governed under the Investment Company Act of 1940
• Must be sold with a prospectus
• Requires FINRA Series 6 license + state insurance license

⚠️ Risks:

• Market volatility
• Surrender charges for early withdrawals
• Complex fee structures

✅ Suitability:

• Suitable for long-term investors
• Not appropriate for short-term savings or clients needing immediate liquidity

📗 Fixed Annuities

🔍 Overview:

Fixed annuities provide guaranteed interest rates and fixed periodic payments, backed by the insurance company’s general account. These are not considered securities and are regulated by state insurance departments.

🔑 Key Features:

• Fixed rate of return
• No market exposure
• Predictable income stream

📜 Regulatory Notes:

• Not registered with the SEC
• No FINRA license required to sell
• Only a state insurance license is needed

✅ Suitability:

• Ideal for conservative investors
• Commonly used for retirees seeking guaranteed income

📙 Variable Life Insurance

🔍 Overview:

Variable life insurance is a permanent life insurance policy with an investment component. The death benefit and cash value fluctuate based on the performance of investments in separate accounts.

🔑 Key Features:

• Combines insurance protection with market-based growth
• Policyholder selects from a menu of investment options
• Tax-deferred cash value accumulation
• Flexible premium options in some versions

📜 Regulatory Classification:

• Registered as a security
• Requires a prospectus
• Must be sold by individuals with a Series 6 license and insurance license

⚠️ Risks:

• Cash value may decline
• Policy lapses if minimum premiums are not maintained
• Investment risk is on the policyholder

📕 Universal Life Insurance (Non-Security)

🔍 Overview:

Universal life insurance offers flexible premiums and a guaranteed minimum interest rate on the cash value. It is not considered a security, and thus does not fall under FINRA or SEC regulation.

🔑 Key Features:

• Adjustable death benefit and premium
• Cash value grows at a declared rate
• Allows policyholders to skip or modify payments within limits

📜 Regulatory Notes:

• Regulated solely by state insurance authorities
• No prospectus or securities license required

✅ Suitability:

• Appropriate for clients seeking long-term life coverage with flexible payment options

🔄 1035 Exchange Rules

• Section 1035 of the Internal Revenue Code allows tax-free transfers between life insurance and annuity contracts.
• Common exchanges include:
  • Life insurance → Life insurance
  • Life insurance → Annuity
  • Annuity → Annuity
• Exchanges must meet suitability standards and be documented properly.

📌 Key Series 6 Exam Concepts to Remember

🎓 Want more Series 6 product guides, licensing rules, and scenario-based questions?
Visit finra-exam-mastery.com for complete Series 6 exam prep — including downloadable cheat sheets, updated flashcards, and real-world simulations to help you pass with confidence.