Which of the following must clearly be illustrated in all sales material for market value adjusted annuities?

The correct understanding is that sales materials for market value adjusted annuities must clearly indicate that the market value adjustment can be either upward or downward. This is crucial because it informs potential investors that the value of their annuity could fluctuate based on current market conditions, which can either benefit or detract from their overall investment value.

By specifying that the adjustment can move in both directions, the sales materials provide a fair and comprehensive picture of the product. It helps consumers understand the risks associated with market value adjusted annuities, emphasizing that while there can be potential gains, there are also potential losses, depending on market performance at the time of withdrawal. This transparency is vital in ensuring that consumers can make informed decisions regarding their investment in such products.

This contrasts with the other options, which inaccurately limit the adjustment to only one direction or incorrectly state its applicability. By clearly stating that the adjustment can vary in both directions, the sales materials uphold regulatory standards and promote consumer protection.