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.

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

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

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