What Types of Investment Options are Offered in Annuities?
Fixed Investment Options Annuities can be fixed or variable. Annuities that offer a guaranteed rate of return that is determined by the insurance company for a set period of time are called fixed annuities. When the guarantee period is over, typically after 1, 3, 5, 7, or 10 years, the company will offer a new rate for the next period, which can be for a different length of time. Many variable annuity contracts also offer the owner the option of allocating a portion of premiums and contract values to a fixed account investment option, which offers a minimum guaranteed interest rate, with higher interest rates being offered periodically as established by the company. Variable Investment Options In a variable annuity, investment choices are offered through a selection of investment portfolios, similar to mutual funds offered generally to the public. The value of the investment portfolios will fluctuate over time, and the variable annuitys return is based on the investment performance of
