Death Benefit Guarantee in a variable annuity pays the beneficiary the higher of the separate account balance or the sum of the purchase payments if death occurs during the accumulation phase. Which term is this feature?

Death Benefit Guarantee in a variable annuity pays the beneficiary the higher of the separate account balance or the sum of the purchase payments if death occurs during the accumulation phase. Which term is this feature?

• A. Death Benefit Guarantee
• B. Surrender Charge
• C. Rider Benefit
• D. Administrative Charge

Answer: (A)

The feature being tested is a death benefit guarantee. In a variable annuity, during the accumulation phase the contract offers a death benefit that ensures the beneficiary will receive at least the larger of two values: the current value in the separate account (the account value reflecting market performance) or the total purchase payments you've made into the contract. This guarantees that, even if market declines reduce the account value, your contributions aren’t lost to the beneficiary. Surrender charges are fees charged when you withdraw funds early, not a death payout promise. A rider benefit is simply an optional add-on with various protections or enhancements, not specifically this guaranteed payout rule. An administrative charge is a ongoing fee for administering the contract. So the described provision matches the death benefit guarantee.

The feature being tested is a death benefit guarantee. In a variable annuity, during the accumulation phase the contract offers a death benefit that ensures the beneficiary will receive at least the larger of two values: the current value in the separate account (the account value reflecting market performance) or the total purchase payments you've made into the contract. This guarantees that, even if market declines reduce the account value, your contributions aren’t lost to the beneficiary.

Surrender charges are fees charged when you withdraw funds early, not a death payout promise. A rider benefit is simply an optional add-on with various protections or enhancements, not specifically this guaranteed payout rule. An administrative charge is a ongoing fee for administering the contract. So the described provision matches the death benefit guarantee.