Question

11 amrit is meeting his clients who invested in annuity contracts. which of the following clients will be able to surrender their contract and receive its cash value?
a. imran, who has contributed to an accumulation annuity contract for the last 1.5 years
b. antony whose annuity contract is funded by his locked - in retirement plan upon retirement
c. jeanna whose annuity contract is funded by a registered pension account
d. safie, who wants to cancel her life annuity contract after receiving payments for 3 months

Explanation:

To determine who can surrender the annuity contract, we analyze each option:

• Option a: Imran contributed to an accumulation annuity for 1.5 years. Accumulation annuities (especially non - locked - in) can often be surrendered, and 1.5 years is a short enough period where surrender is more likely compared to locked - in or long - term payout situations.
• Option b: Antony’s annuity is funded by a locked - in pension plan. Locked - in pension plans have restrictions, and surrender is not allowed as the funds are for retirement.
• Option c: Jeanna’s is a life annuity contract. Life annuities provide lifetime income, and canceling (surrendering) is not typical as they are for long - term income.
• Option d: Safie received payments for 3 months. Once an annuity starts paying out (like a life annuity or payout annuity), surrendering is not usually an option as the payout phase has begun.

So Imran (option a) is the one who can surrender.

Answer:

a. Imran, who has contributed to an accumulation annuity contract for the last 1.5 years