Regarding the maturity guarantee in a segregated fund contract, which statement accurately reflects its function?

Question: Regarding the maturity guarantee in a segregated fund contract, which statement accurately reflects its function?

Answer options: ✅ The maturity guarantee ensures that the annuitant receives at least a specified percentage of their deposited premiums at the end of the contract term, even if the market value is lower.

• The maturity guarantee allows the annuitant to withdraw the full original investment at any time without penalty before the contract reaches its maturity date.
• The maturity guarantee guarantees that the fund will achieve a predetermined rate of return over the life of the contract, regardless of market conditions.
• The maturity guarantee automatically resets the guaranteed amount to the highest market value achieved by the fund every year until maturity.

Correct answer: The maturity guarantee ensures that the annuitant receives at least a specified percentage of their deposited premiums at the end of the contract term, even if the market value is lower.

Explanation: The maturity guarantee in a segregated fund protects the annuitant's capital at the end of the contract term. It ensures that at maturity, the annuitant receives at least the guaranteed percentage (typically 75% or 100%) of their deposited premiums, less any withdrawals, even if the net asset value of the fund has declined.