Arthur purchased an Individual Variable Insurance Contract (IVIC) as a deferred annuity contract on July 15, 2006, with a single deposit of $12,000. The money was deposited to a growth equity fund. The fund offered the minimum statutory guarantee at death of the annuitant or maturity of the plan. Due to a market downturn in 2008 the fair market value of the plan units reduced to $11,200. The next year the fund recovered and at a time when the units owned by the deferred annuity are worth $17,500 Arthur exercises his "reset option" under the plan with regard to the guarantees. If Arthur surrenders the annuity on July 15, 2016, when the plan units have declined in value to $12,900, how much will he receive from the insurance company?

A) $9,000 

B) $12,900 

C) $13,125 

D) $17,500

Answer rating: 100% (QA)

To determine the amount Arthur will receive upon surrendering the annuity on July 15 2016 we need to ... View the full answer