Variable annuity for you
One type of annuity is the variable annuity. This is one form of contract that can be made between you and the insurance company where the insurer agrees to make periodic payments to you beginning at the time of the signing of the contract or at a future date to be set. The variable annuity contract can be acquired by making a single purchase payment or can be acquired by making a series of payments.
This kind of annuity will offer you a range of investment options and the value of the investment as a variable annuity will vary as well and this will depend on the performance and the investment options that you choose. Usually investment options are mutual funds that can be invested in stocks, bonds, money market instruments or a combination of these three. Mutual funds and variable annuities are two different things in the market.
These two differ in many ways. For example, the variable annuities will allow you to receive periodic payments for the rest of your life or the life of your recipient. Another difference is that this will feature a death benefit. For example if you die and the periodic payments has been started, then your beneficiary will start will received a specified amount, which is equivalent to at least the amount of your annuity purchase. The benefit can be collected if at the time of your death the account value is less than the guaranteed amount. And lastly, the nice thing about variable annuity is tax this is tax deferred. What this means is that you will pay no taxes until the moment you withdraw your money. You will also be given the option to transfer the money to another variable annuity without you paying for the tax. But when you now take the money from that annuity, then there will be a tax.
