One of the most common questions we get is What is a Variable Annuity?
The answer is simple. A variable annuity is a tax deferred annuity that uses securities as the accumulation source. Variable annuities are part insurance and part security and are sold by special dually licensed agents.
Variable annuities are securities because the policy holder, not the insurance company, assumes the market risk of the portfolio.
As stated by the SEC, “A variable annuity is a contract between you and an insurance company, under which the insurer agrees to make periodic payments to you, beginning either immediately or at some future date. You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments.”“A variable annuity offers a range of investment options. The value of your investment as a variable annuity owner will vary depending on the performance of the investment options you choose. The investment options for a variable annuity are typically mutual funds that invest in stocks, bonds, money market instruments, or some combination of the three.”
For additional information on Variable Annuities see the SEC (United States Securities and Exchange Commission) publication: Variable Annuites, What You Should Know
Please work with an expert at matching your individual financial and retirement planning needs to the most appropriate annuity.
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Compliance # CSP_1057 20160610