What is a Combination Annuity?
Combination annuities are examples of an annuity format that combines the more desirable qualities of the fixed annuity and the variable annuity. Sometimes referred to as a hybrid annuity, this investment option allows the investor to respond to shifts in the market in a way that will result in the best possible return on the investment. This degree of versatility in the arrangement of the annuity can allow the investor to make use of the asset in the event that unforeseen circumstances arise that call for a change in the way annuity payments are issued. The best way to understand a combination annuity is to first address the way that fixed and variable annuities function. A fixed annuity usually involves a preset schedule of annuity payments that are disbursed over the life of the annuity coverage. With a fixed annuity approach, the person who sets up the coverage assumes the risk rather than the person who is insured. The variable annuity tends to forego payments to the holder until
