Just as is the case with any annuity, a variable annuity is a contract between you and the insurance company. Variable annuities are tax-deferred contracts that allow you to make a choice between some investments. After retirement, the insurance company pays you out some income depending on the payout of the investments that you chose.

They are, therefore, together with fixed annuities, a highly preferred method of saving for retirement by most seniors. The major difference between a variable annuity and a fixed annuity is the fact that the latter will pay out a guaranteed amount as opposed to the varying amounts of the former.

Features of Variable Annuities

Often, variable annuities are compared to mutual funds. This is because they offer almost similar investment features. However, variable annuities will typically have these three features that are not found in mutual funds.

Types of Variable Annuities

As is the case with other annuities, variable annuities are divided into two major types depending on the beginning of the payout period.

There really is so much more that pertains to variable annuities. If you feel confused, do not worry. Contact us today and we will be glad to tell you more about the variable annuities.

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