In contrast to a fixed annuity, the key features of a variable annuity can fluctuate (they are “variable”) during the accumulation period and during the payout phase. Also in contrast to a fixed annuity, the variable annuity contract holder assumes much of the investment risk. With a variable annuity, the insurance company provides the contract holder with the ability to determine how his or her premiums are invested. One investment option is a variable account which typically consists of equity, bond or money market mutual funds. The other option is the general account of a variable annuity which provides a guaranteed return. The contract holder decides how much risk or variability they want to tolerate by allocating premium payments among the general and variable accounts. The amount of money accumulated and the amount of income during the payout phase are determined by the returns of these accounts. With a variable annuity: 1) the money can go in as a single premium payment or a series of payments; 2) the money is invested at a variable or non guaranteed rate; 3) payments are variable and can begin immediately or at some future date.
Submitted by Anonymous on
Recent data from LIMRA that shows 2010 totals:
- Overall individual sales in United States
Submitted by tom on
Another very interesting article from Leslie Scism of the Wall Street Journal (article can be viewed by clicking here).
A continuation of the discussion thread on low fee annuities that can be viewed by clicking here.
The Journal article discusses variable annuities and the impact that relatively inexpensive ETFs are having on product development.
Submitted by tom on
An interesting article (click here to read) from Darla Mercado at Investment News discusses
