PosFCF, you responded:

<<Yes, all annuities that haven't been annuitized have a death benefit. You are incorrect though in what would be paid to your beneficiaries in your example.>>

You ARE correct here . . . I was wrong.

To get back on track - the structure of the life insurance protection benefit in a variable annuity is so different from term insurance; I don't see how anyone can do a valid comparison analysis. For Variable Life contracts, using term insurance for such an analysis is pretty straight forward.

If you know it can be done, then please share that . . . . I'm all ears. ;-)

<< The largest commissions are paid on VARIABLE ANNUITIES, >>

True

<< therefore they will always have the most appeal to those licensed to sell them, >>

False

<< and those licensed to sell them are also licensed to sell the FIXED ANNUITIES. >>

True

<< Because of the money incentives, VARIABLE ANNUITIES will always have larger sales numbers. >>

Can you substantiate this? Does your conclusion consider that there may be more people licensed to sell Fixed Annuities than Variable Annuities?

<< It is the way of capitalism. >>

But not EVERYBODY is so commission driven.

<< If you were a broker and you could offer a client a straight FIXED ANNUITY that paid a rate of 3% to the client, and if you did, your commission was 2% of the principal; or you could sell the client a VARIABLE ANNUITY that had a fixed bucket within it that also paid 3% to the client, but would pay you 7% in commissions, which would you sell?
I don't mean this personally, but rather, as a rhetorical question to illustrate what the real choices for brokers are and why VARIABLE ANNUITIES are presented (and sold) so often. >>

Well, I can tell you that I HAVE had these kinds of choice many times (not the 7% of course, since that's not nearly how high a typical variable annuity commission is . . . especially on a fixed rate "bucket"). And I can tell you that in EVERY CASE, it's been the Fixed Annuity sold, as expenses in a Variable Annuity were just too great. It's actually a no-brainer!