1.3.5.4. Communications Regarding Variable Insurance Products
FINRA has several rules that apply specifically to communications involving variable annuities and variable life insurance policies.
• The communication must clearly describe the product as a variable annuity or a variable life insurance policy. Because of the differences between variable products and mutual funds, the communication cannot imply that the product is a mutual fund.
• The communication cannot indicate that the product is a short-term or liquid investment because variable products often come with surrender charges and penalties for early withdrawals.
• The communication must not exaggerate the safety of guarantees (e.g., guaranteed minimum death benefit or a guaranteed schedule of payments). After all, insurance companies can go out of business and not pay out claims. Nor can the communication guarantee an investment return or principal value or imply that an insurance