Which annuity type's payments vary with the value of investments in a segregated fund?

Which annuity type's payments vary with the value of investments in a segregated fund?

• A. Integrated Annuity
• B. Indexed Annuity Payments
• C. Variable Annuity
• D. Split Annuity Strategy

Answer: (C)

Variable annuities are designed so the payout is not fixed but follows the value of the underlying investments held in a segregated fund. Segregated funds are held in a separate account by an insurer, and their value moves with market performance. As those fund values rise, the annuity payments can rise; if the fund value falls, payments can fall too. This direct link to investment performance is what distinguishes a variable annuity from other types that base payments on a set formula, an index, or a different product structure.

Variable annuities are designed so the payout is not fixed but follows the value of the underlying investments held in a segregated fund. Segregated funds are held in a separate account by an insurer, and their value moves with market performance. As those fund values rise, the annuity payments can rise; if the fund value falls, payments can fall too. This direct link to investment performance is what distinguishes a variable annuity from other types that base payments on a set formula, an index, or a different product structure.