Question

At the time of annunciation of a variable annuity, which of the following CANNOT fluctuate?

1) Principal
2) Interest
3) Investment returns
4) Death benefit

Answer 1

The death benefit is the part of a variable annuity that cannot fluctuate at the time of annunciation. The principal, interest, and investment returns can vary, while the death benefit is predetermined and does not change.

Step-by-step explanation:

At the time of annunciation of a variable annuity, the one factor that cannot fluctuate is the death benefit. When an annuity is annuitized or payments begin, factors such as principal, interest, and investment returns can fluctuate based on the performance of the underlying investments and the type of payout option chosen.

However, the death benefit, much like that found in cash-value (whole) life insurance policies, is a fixed amount that was set in the contract and is paid to beneficiaries upon the death of the annuity owner, assuming the death benefit provision is in place and has not been exhausted through withdrawals.