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NEW QUESTION: 1
Mr. Fast Lane met an early death at the age of 42. Mr. Lane had been making contributions to a variable
annuity contract for several years, and at the time of his death, his contributions totaled $25,000.Although
the value of the contract had at one time reached $40,000, earnings included, a downturn in the market
has resulted in a contract value of only $23,000.How much will Mr. Lane's beneficiaries receive as the
death benefit associated with this contract under these circumstances?
A. the average of what its value once was and what it is today: $31,500
B. nothing, since the contract now has a value that is less than Mr. Lane's total contributions
C. $25,000
D. $23,000
Answer: C
Explanation:
Since Mr. Lane died while he was still making contributions, his beneficiaries will receive
$ 25,000. If the annuitant dies during the accumulation period, the death benefit is equal to the value of the
contract or the total of the contributions, whichever is greater.


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