How does the term no-load apply to annuities?

How does the term no-load apply to annuities?

• A. No fees of any kind.
• B. Front-end charges but no ongoing fees.
• C. No front-end sales charge and no internal or rider fees.
• D. No front-end sales charge, but internal fees and rider fees may apply.

Answer: (D)

No-load in annuities means there isn’t a sales charge charged at the purchase. But that doesn’t mean there are no costs at all. A no-load annuity can still have ongoing internal expenses, such as mortality and expense charges or contract maintenance fees, and riders (like guaranteed income riders) often come with their own fees. So the right description is that you won’t pay a front-end sales charge, but internal fees and rider fees may apply. This reflects how no-load refers to the absence of up-front sales charges while recognizing that other costs can still affect the contract’s value.

No-load in annuities means there isn’t a sales charge charged at the purchase. But that doesn’t mean there are no costs at all. A no-load annuity can still have ongoing internal expenses, such as mortality and expense charges or contract maintenance fees, and riders (like guaranteed income riders) often come with their own fees. So the right description is that you won’t pay a front-end sales charge, but internal fees and rider fees may apply. This reflects how no-load refers to the absence of up-front sales charges while recognizing that other costs can still affect the contract’s value.