What is a variable annuity?
It is a contract between you (the annuity owner) and a life insurance company. In return for your payment, the insurance company agrees to provide either a regular stream of income or a lump sum payout at some future time (generally, once you retire or pass age 59 1/2). Your premiums are invested in one or more sub-accounts and/or fixed interest accounts. The value will fluctuate so that upon redemption they may be worth more or less than the original cost. No taxes are due until any earnings are paid out. (If you make a withdrawal before age 59 1/2, you could incur a 10% tax penalty in addition to ordinary income tax.
A variable annuity is a popular investment vehicle for long-term or lump sum investments. When you buy an annuity, you pay the issuer in return for guaranteed payments at a specific interval. You might begin receiving monthly payments immediately upon purchasing an annuity, or you might wait years before you begin receiving benefits from your annuity. Different types of annuities have different risks and tax benefits and liabilities. A Variety of Investment Options The biggest benefit of a variable annuity is the ability to shift your investments around within the annuity. You can designate how you would like to invest your funds; for example, you could put half of your investment toward stocks, and the rest toward bonds. Many variable annuities allow you to shift your investments around at any point prior to the payout period. You may begin by investing all of your annuity funds in a stock position, but decide a year or two down the line to shift to a more balanced portfolio. Look for
A variable annuity is invested in subaccounts representing a wide variety of investment options and does not have a fixed rate of return. With a variable annuity, you have the potential to earn a higher rate of return on your investment, along with the potential for loss of principal. When you are ready to receive your income, your payment stream will vary, depending on the performance of the underlying investments.
A variable annuity is a personal account that millions of Americans are using to build their retirement nest eggs. In a variable annuity, you accumulate money by investing in portfolios which are similar to mutual funds except that they are tax deferred so your money grows faster. Most variable annuities also offer a fixed interest rate account in combination with the variable investment options. When you are ready to retire, variable annuities offer a wide range of payout options, including payments that are guaranteed to continue for as long as you live, just like a pension. Variable annuities also offer a number of valuable insurance benefits, including a death benefit that guarantees that the owner’s beneficiaries will receive at least the amount of money that was invested, living benefits that provide principal protection during the owner’s lifetime, and the right to elect annuity payments that are guaranteed to last for life.
A variable annuity is a contract between you and an insurance company, under which the insurer agrees to make periodic payments to you, beginning either immediately or at some future date. You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments. A variable annuity offers a range of investment options. The value of your investment as a variable annuity owner will vary depending on the performance of the investment options you choose. The investment options for a variable annuity are typically mutual funds that invest in stocks, bonds, money market instruments, or some combination of the three. Although variable annuities are typically invested in mutual funds, variable annuities differ from mutual funds in several important ways: First, variable annuities let you receive periodic payments for the rest of your life (or the life of your spouse or any other person you designate). This feature offers protection against the possibi
