Operating Expenses Guarantee provides which protection?

• A. A cap on the insurer's operating expenses
• B. A guarantee of payments for life
• C. A guarantee of a minimum return
• D. A penalty for early withdrawal

Answer: (A)

The key idea is about protecting the contract from rising costs by limiting what the insurer can charge for operating expenses. An Operating Expenses Guarantee sets a cap on the fees the insurer can deduct for administration and related costs, helping to preserve the value of any guarantees inside the policy or annuity. It does not promise payments for life, it does not guarantee a minimum return, and it does not impose a penalty for early withdrawal.