Question

What happens to the cash value of a market value adjusted annuity if it's surrendered prior to the end of the stated guarantee period?

A. Subject to market value adjustment.
B. Subject to no adjustments.
C. Subject to a surrender charge only.
D. Cash value is forfeited.

Answer 1

The cash value of a market value adjusted annuity is subject to market value adjustment if surrendered prior to the end of the stated guarantee period.

Step-by-step explanation:

When a market value adjusted annuity is surrendered prior to the end of the stated guarantee period, the cash value is subject to certain adjustments.

Option A is correct: The cash value is subject to market value adjustment. This means that the surrender value of the annuity could be more or less than the initial cash value, depending on market conditions.

Option C is incorrect: There may also be a surrender charge in addition to the market value adjustment.