New York State Life Insurance Exam Questions Practice Question
Prior to annuitization, what is the nonforfeiture value of an annuity?
Correct Answer: D
Rationale: The nonforfeiture value of an annuity represents the amount the owner can receive if they decide to withdraw from the contract before annuitization.
Option A is incorrect because it inaccurately limits the nonforfeiture value to only premiums vested for three years, ignoring the total paid premiums and interest.
Option B is misleading as it suggests that only the total premiums paid are considered, excluding any interest earned or deductions for withdrawals.
Option C is wrong because it does not account for any withdrawals or surrender charges, which can affect the total cash value.
Option D accurately encompasses all premiums paid, interest accrued, and necessary deductions, reflecting the true nonforfeiture value.
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