SIE Exam Question 367: Answer and Explanation

Question: 367

Which of the following statements is TRUE regarding the value of variable contract annuity units?

• A. It is linked to the performance of the insurance company's general account
• B. It is determined by a formula specified in the annuity contract
• C. It fluctuates based on the performance of separate account assets
• D. It is fixed at the time of the contract's annuitization

Correct Answer: C

Explanation:

C - Annuity units in variable annuity contracts fluctuate in value based on the performance of separate account assets. The number of units is fixed but their value continues to fluctuate.