The national annuities guide covers types, phases, payout options, surrender charges and taxation. Delaware annuity rules come from two places: 18 Del. C. Chapter 29, which sets contract provisions, and Regulation 1214, Delaware's best-interest rule.

Contract provisions (18 Del. C.)

• Grace period: one month, but not less than 30 days, for payments after the first. This applies to annuity and pure endowment contracts other than reversionary, survivorship or group (2919).
• Incontestability: incontestable after two years from issue, during the lifetime of the person whose statements were required, except for nonpayment (2920).
• Misstatement of age or sex: payments are adjusted to what the premium would have bought at the correct age or sex. Overpayments may be recovered from future payments with interest of up to 6% (2922).
• Reinstatement: within one year of default unless the cash value was paid out. Reversionary annuities allow three years (2924).

Best interest (Regulation 1214)

• A producer recommending an annuity must act in the consumer's best interest, without putting the producer's or insurer's financial interest first.
• The rule does not require:
  • the lowest-commission product
  • ongoing monitoring
  • a securities license for non-securities advice
• Consumer profile: age, income, finances, objectives, time horizon, existing assets, liquidity needs, liquid net worth, risk tolerance, tax status and more (Reg. 1214-3).
• Disclosure: the producer's role, the products and insurers the producer can sell, the sources and types of compensation, and the consumer's right to ask for more compensation details.
• Exchanges and replacements: consider surrender charges, lost benefits, whether the new product substantially benefits the consumer, and any other exchange in the past 60 months.
• Exempt: contracts funding ERISA, 401(a), 401(k), 403(b), SEP, SIMPLE, government and church plans, and structured settlements. Individually sold annuities, including IRA rollovers, are covered.
• Training: a one-time course of at least four credits (Reg. 1214-5).
• Records: kept five years (Reg. 1214-7).

Licensing and guaranty

• Fixed annuities are sold under the Life line. Variable annuities require a Life license plus FINRA registration (1706(d), 1707(a)(5)).
• The Life and Health Insurance Guaranty Association covers up to $250,000 in annuity present value (4403).

Exam traps

• Reinstatement: annuities allow 1 year. Life policies allow 3 years.
• Best interest doesn't require the cheapest product or ongoing monitoring. It does cover IRA rollovers.
• Annuity guaranty limit: $250,000.