Which of the following statements regarding a refund annuity is true?
A) The monthly income provided by the policy varies as a function of the insurer's actual investment experience.
B) The insurance company agrees to pay a guaranteed rate of interest on the insured's money.
C) A specified monthly income is provided for a stated number of years without consideration of any life contingency.
D) If the annuitant dies, the designated beneficiary receives monthly payments until the total purchase price of the annuity is paid back.
E) The insurance company guarantees the annuitant a stated amount of monthly income for life.

Question

Quizplus · Accepted Answer

A refund annuity ensures that if the annuitant dies before recovering the total purchase price of the annuity, the remaining amount will be paid to a designated beneficiary, typically in the form of continued monthly payments until the full purchase price has been returned.

Which of the Following Statements Regarding a Refund Annuity Is