When determining the accumulation value of a deferred annuity, what is subtracted from the total premiums paid plus interest?

Prepare for the Kentucky Life Insurance State Exam with interactive quizzes, flashcards, and multiple choice questions, each complete with hints and explanations. Pass your exam with confidence!

In the context of calculating the accumulation value of a deferred annuity, the correct consideration involves subtracting withdrawals and expenses from the total premiums paid plus interest earned on those premiums. The accumulation value essentially reflects the current value of the account before annuitization, representing the money available for distribution or conversion into an income stream.

Withdrawals represent any sums taken out of the annuity before the distribution phase, which directly reduce the value of the account. Additionally, expenses, which may include administrative fees or other charges associated with maintaining the annuity, are also deducted from the accumulation value since they affect the overall growth of the investment.

This method ensures a more accurate representation of the net value available to the policyholder, highlighting the impact of any actions taken or costs incurred during the accumulation phase. Understanding these deductions is critical for individuals managing their annuity investments and planning for future financial needs.

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