The projected breakeven point in a unit-linked savings plan is the

• A. duration at which the projected value first exceeds total contributions.
• B. initial duration of the plan during which no units are allocated to the plan.
• C. initial duration during which less than 100% of the contribution paid is used to secure units.
• D. time at which the plan is expected to mature.

Answer: (A)

The main idea here is identifying the moment when the investment has covered its own cost. In a unit-linked savings plan, you pay in contributions to buy units whose value moves with the market. The projected breakeven point is the point in time when the projected value of all those units first surpasses the total contributions you’ve paid to date. It marks when the plan has, on a forecast basis, recovered what you invested, before considering further gains or losses.

This isn’t about a period with no unit allocation, or about how much of each contribution is used to secure units, or about when the plan matures. Those are different concepts; breakeven focuses on the balance between money put in and value of units held, based on expected future performance.