Variable Annuity
By far the most popular contract in the annuity family, a
variable annuity gives you the most investment flexibility
and opportunities for long-term growth. First introduced in
the late 1970s, variable annuity contracts were designed to
appeal to more aggressive investors who also wanted the benefits
of annuity tax deferral.
A variable annuity offers a range of investment options to
give a policyholder control over where his or her money is
invested. Variable annuities are similar to mutual funds in
their equity and/or bond investment strategies. Each investment
portfolio option is managed by a professional money manager,
and you can mix and match investment portfolios by freely
transferring money from one portfolio to another without tax
consequences.
Variable annuity performance will vary based on the returns
of the underlying portfolios. However, most variable annuity
contracts also offer a fixed or guaranteed account option
so you have the flexibility to allocate some of your assets
to a conservative investment option.
Variable annuities are designed for retirement and offer
tax-deferred growth. As such, money withdrawn from a variable
annuity before age 59½ may be subject to a 10% federal
tax penalty.
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