Question

A variable annuity's investment return each month is based on

A) the contracts stated guaranteed monthly return.
B) the performance of the separate account.
C) the assumed interest rate stated in the contract.
D) the performance of the insurance company's general account.

Answer 1

The investment return of a variable annuity is based on the performance of the separate account.

Step-by-step explanation:

The variable annuity's investment return each month is based on the performance of the separate account (option B) in this case.

A variable annuity is a type of investment account that allows the investor to choose from a variety of investment options, known as separate accounts, which may include stocks, bonds, or other assets.

The returns on these separate accounts determine the investment return of the variable annuity.