Achieve Financial Brilliance with the 2026 CFC Exam – Crack the Code to Consulting Success!

When an owner surrenders a deferred annuity before annuitization, nonforfeiture laws provide protections that ensure the owner receives a fair value for their investment in the annuity. The correct answer highlights the guaranteed surrender value, which is the minimum amount the insurer is required to pay the policyholder upon surrender of the contract.

This guaranteed surrender value is designed to ensure that individuals do not lose all their investment if they decide to withdraw their funds prematurely. It typically factors in premiums paid, any applicable deductions for expenses and charges, and often, the accumulation of interest on the premiums, ensuring that the owner can reclaim at least this amount regardless of market conditions at the time of surrender.

The other options do not align with the guarantees set forth in the nonforfeiture laws. For example, the current market value might fluctuate based on the performance of the underlying investments and is not guaranteed. Similarly, the premiums paid do not account for any accrued interest or charges, and projecting future value is speculative and not applicable in the context of a surrender before annuitization. Thus, the focus on the guaranteed surrender value clearly illustrates the protections nonforfeiture laws aim to provide for annuity owners.