Spread the love

The question is often asked. What is a variable annuity? When taken into context to mean the type of investment strategy used for individuals who wish to have a steady stream of income during their retirement years, this type of investment should be considered risky. Most investors warn that investing in these annuities is risky if there is not adequate research done. But, when it is done, and other types of tax deferred investments are paid to the level that is possible, any extra funds may in fact be nicely added to a variable annuity. Ask the question, what is a variable annuity and expect an answer explaining the various types of annuities currently available cialis rezeptfrei schweiz.

What is a variable annuity can be defined only after explaining what an annuity is in the first place. The simplistic answer is that an annuity is a contract between an individual and the insurance company. That contract will outline if the annuity is variable or if it is fixed. In a fixed contact, the annuity is paid out over a period in fixed payments. A set interest amount is earned over the lifetime of the investment. A fixed annuity is much safer because the risk of losing significantly is minimal. So, the question then is, compared to this, what is a variable annuity?

The answer to that is just the opposite. In a variable annuity, the underlying investments the funds from the annuity are put into may be more hostile. They are often more risky and while that may or may not be a good thing, it does have the advantage of allowing the investor to earn substantially more from the annuity. Of course, they can also lose money with these types of accounts as well. The variable factor is that the principal balance in the annuity can fluctuate up or down over the lifetime of the annuity.

Keeping this in mind, it is understood that investors should carefully consider the benefits of a variable annuity prior to actually investing in them. There are options that may be added to the annuity, at an additional cost, to make it more stable, such as a living benefit. Nevertheless, this type of annuity will be somewhat risky and therefore is not right for some. The annuity is invested in the stock market, and usually in mutual funds.

What is a variable annuity? It is an opportunity to potentially earn a sizable amount of money from a current fund. There are various types of variable annuities too, including those that are offered by different insurance companies. Investors should take the time to study all of their options and compare the funds, as well as any account or management fees, associated with the annuity prior to investing in it. This will provide at least a small layer of protection for the investor. Learn what the annuity is being invested in, what the past performance of the annuity is as well as what costs are associated with using the annuity.