A company offers a modern insurance contract that has the following features:

• A benefit linked to the performance of an investment fund
• A guaranteed minimum return on the premiums paid
• A guaranteed minimum death benefit payable if the insured dies before the contract matures
• A contract term of 7 years

Determine the type of contract offered.

• Term life insurance
• Universal life insurance
• Variable annuity
• Endowment insurance
• Reversionary annuity

Copyright 2024 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.

Answer: C

Key is that the benefit is linked to the performance of an investment fund. That is true only for C.

Copyright 2024 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.