Variable Annuities

A variable annuity is a contract between the buyer and the insurance company that it is purchased from. The contract or insurance policy promises the purchaser regular income payments. Immediate annuities start providing income from day one. Deferred annuities provide income in the future and are designed to work as a savings or accumulation vehicle.

What makes a variable annuity different from a mutual fund?

• Lifetime income. An annuity can offer guaranteed income to the insured. A mutual fund will provide as long as there is money remaining in the account.
• Death benefit. Annuities can offer protection to the insured's spouse. If the insured dies, the spouse would receive a certain amount of income or lump sum payment.
• Tax-deferred. Growth inside of an annuity is not taxed until the money is withdrawn.

Variable annuities typically invest in stocks, bonds and money market funds.

Note: Just like any other type of investment, proper research is needed. This includes knowing your risk tolerance and time horizon. Past performance of a fund is not an indication of future results. Variable annuities are generally used when other retirement accounts have been "maxed out" for the given tax year.

To see if a variable annuity is right for your situation, contact a local financial advisor.

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