----------------- variable annuity -----------------
Variable and fixed annuities are the two basic options to choose from when it comes to purchasing an annuity. As opposed to a fixed annuity, a variable annuity offers a wide array of investment options from which to choose from. Some of these investment options include stocks, bonds or money market account(s). Whereas a fixed annuity guarantees growth, a variable annuity cannot. In fact, a variable annuity can go up or down, dependent on the success or lack thereof of your investment options. The up side to this is that if your investment options are extremely successful, you could end up receiving much more than you would have from a fixed annuity plan. On the flip side, both your principal and return can go down if your investment options add up to a loss. In essence, choosing a variable annuity option is much more of a gamble than a fixed. There are some variable annuities that offer a fixed option as a sub-account, freeing you up to have some safety/stability whilst at the same time taking a gamble on some of the other flex options such as bonds or stocks.
Although a variable annuity option carries with it higher fees than does a fixed annutiy it also provides many more features than are available through a fixed annuity plan. The higher fees, however, can be complicated and have the possibility of including such things as annual contract charges, administrative expenses, surrender fees, etc.
>--------------------------------------------------------------------------<
How does a variable annuity compare with a FIXED ANNUITY
>--------------------------------------------------------------------------<
|
