Which annuity option will be paid out until the full value of the principal is returned?

• A. Refund Annuity
• B. Mortality Guarantee
• C. Operating Expenses Guarantee
• D. Annuity with period certain

Answer: (A)

Refund annuity is designed to return the original principal through its payout. If the annuitant dies before the total payments equal the principal, the remaining amount is paid to a beneficiary, ensuring the full value is recovered. That makes it the option that guarantees the principal will be returned. Mortality guarantee focuses on continuing payments for life or a minimum period, not on returning the principal. Operating expenses guarantee protects the insurer’s costs rather than returning principal. Annuity with period certain pays for a fixed number of years, not necessarily until the principal is fully returned, so it isn’t the best fit for guaranteeing full principal return.