Expense Guarantee is defined as what?

Expense Guarantee is defined as what?

• A. a guarantee by an insurer that expenses for a variable product will not exceed maximum levels
• B. a guarantee of minimum interest rate on a fixed annuity
• C. a guarantee of death benefit
• D. a guarantee of absolute return

Answer: (A)

Expense Guarantee means the insurer promises that the fees charged for the variable product won’t exceed a specified maximum. This protects the contract owner from high ongoing costs eroding returns, by capping charges such as mortality and expense risk fees, administration fees, and investment management fees. It does not imply a minimum interest rate like a fixed annuity, nor a guaranteed death benefit, nor any promise of absolute return. Those are separate guarantees; this one specifically caps the expenses tied to the variable contract.

Expense Guarantee means the insurer promises that the fees charged for the variable product won’t exceed a specified maximum. This protects the contract owner from high ongoing costs eroding returns, by capping charges such as mortality and expense risk fees, administration fees, and investment management fees. It does not imply a minimum interest rate like a fixed annuity, nor a guaranteed death benefit, nor any promise of absolute return. Those are separate guarantees; this one specifically caps the expenses tied to the variable contract.