Sarah, a 55-year-old small business owner in British Columbia, wants to plan for her retirement. She's considering a segregated fund contract with a 75/100 death benefit guarantee, meaning 75% of deposits at maturity and 100% of deposits (or highest reset value) at death. What is a key advantage of this specific guarantee structure for Sarah?

Question: Sarah, a 55-year-old small business owner in British Columbia, wants to plan for her retirement. She's considering a segregated fund contract with a 75/100 death benefit guarantee, meaning 75% of deposits at maturity and 100% of deposits (or highest reset value) at death. What is a key advantage of this specific guarantee structure for Sarah?

Answer options: ✅ "It ensures her beneficiaries will receive at least 100% of her deposits, protecting them from market downturns, even if the market value drops substantially."

• "It guarantees that Sarah herself will receive at least 75% of her deposits back at maturity, regardless of market performance, providing a floor for her retirement savings."
• "This structure provides a higher potential for capital appreciation compared to segregated funds with 100/100 death and maturity guarantees."
• "The 75/100 guarantee ensures that the segregated fund is eligible for inclusion in her Tax-Free Savings Account (TFSA) when she retires."

Correct answer: "It ensures her beneficiaries will receive at least 100% of her deposits, protecting them from market downturns, even if the market value drops substantially."

Explanation: The 75/100 death benefit guarantee ensures that in the event of the annuitant's death, the beneficiaries will receive at least 100% of the deposits (or the guaranteed value from a reset, if higher), protecting the inherited capital from market declines. This addresses the '100' portion of the 75/100, focusing on the death benefit.