Which annuity features monthly payments that vary according to the value of investments in a segregated fund?

Which annuity features monthly payments that vary according to the value of investments in a segregated fund?

• A. Variable Annuity
• B. Structured Settlement Annuities
• C. Split Annuity Strategy
• D. Integrated Annuity

Answer: (A)

Payments that change with how the underlying investments perform point directly to a variable annuity. In this type of contract, the money behind the payments is allocated to investment subaccounts (often including segregated funds), so the monthly income rises or falls with the fund value. If the investments do well, payouts can increase; if they perform poorly, payouts can shrink. Structured settlement annuities, by contrast, lock in fixed payments over a set schedule, regardless of investment results. The other terms aren’t standard product types describing a payout that fluctuates with investment performance tied to segregated funds, so they don’t fit the scenario.

Payments that change with how the underlying investments perform point directly to a variable annuity. In this type of contract, the money behind the payments is allocated to investment subaccounts (often including segregated funds), so the monthly income rises or falls with the fund value. If the investments do well, payouts can increase; if they perform poorly, payouts can shrink.

Structured settlement annuities, by contrast, lock in fixed payments over a set schedule, regardless of investment results. The other terms aren’t standard product types describing a payout that fluctuates with investment performance tied to segregated funds, so they don’t fit the scenario.