In a Variable Annuity, what affects the accumulation and benefit payments?

The correct choice highlights that the investment experience of the separate account is the primary factor impacting both the accumulation and benefit payments of a Variable Annuity. In these products, the funds are typically invested in a variety of securities, such as stocks and bonds, through a separate account that can fluctuate in value based on market performance. As a result, the value of the annuity's accumulation will rise or fall depending on how well these investments perform over time.

Consequently, the benefit payments, which are based on the account's value at the time of annuitization, will also be directly affected by this investment experience. It reflects the inherent nature of Variable Annuities, as opposed to fixed annuities, where benefit payments are determined by predetermined interest rates.

Other factors mentioned, like an individual’s age at retirement or the length of time the annuity is held, may influence the overall planning and withdrawal strategies but do not directly impact the fundamental nature of investment performance within the context of a Variable Annuity. The fixed interest rate set by the insurer is a characteristic of fixed annuities, not Variable Annuities, where returns are linked to market performance rather than guaranteed rates.