For a segregated fund death benefit guarantee of 100%, what happens if the annuitant dies when the market value of the fund is higher than the guaranteed amount?

Question: For a segregated fund death benefit guarantee of 100%, what happens if the annuitant dies when the market value of the fund is higher than the guaranteed amount?

Answer options:

• The beneficiary receives only the guaranteed amount. ✅ The beneficiary receives the higher market value.
• The beneficiary receives the guaranteed amount and the insurer keeps the difference.
• The beneficiary receives the average of the market value and the guaranteed amount.

Correct answer: The beneficiary receives the higher market value.

Explanation: The death benefit guarantee provides a minimum 'floor'. The beneficiary is entitled to receive the greater of the guaranteed amount (e.g., 100% of deposits) or the current market value of the fund at the time of death.