Question

With a variable annuity, which of the following factors is NOT involved in determining the amount of an annuitant's first annuity payment?

A. The settlement option selected
B. The value of the annuitant's interest in the separate account
C. An actuarial factor base on the annuitant's life expectancy
D. The number of annuity units

Answer 1

The number of annuity units is not involved in determining the first payment of a variable annuity as it pertains to the account performance during accumulation rather than the annuitization phase.

Step-by-step explanation:

In a variable annuity, the factors that determine the amount of an annuitant's first annuity payment typically include the settlement option selected, the value of the annuitant's interest in the separate account, an actuarial factor based on the annuitant's life expectancy, and the number of annuity units owned by the annuitant. However, the factor that is NOT involved in determining the first payment is the number of annuity units. This is because annuity units are used to allocate the separate account's performance to the annuitant's account balance during the accumulation period, but the first payment amount is based on the account value, chosen payout option, and actuarial factors at the time of annuitization.