Variable Annuity


DEFINITION of 'Variable Annuity'

An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio.


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BREAKING DOWN 'Variable Annuity'

The portfolio generally invests in equity securities and its performance determines the amount of this total payment.

  1. Annuity

    A financial product that pays out a fixed stream of payments ...
  2. Annuity Contract

    The written agreement between an insurance company and a customer ...
  3. Deferred Annuity

    A type of annuity contract that delays payments of income, installments ...
  4. Fixed Annuity

    An insurance contract in which the insurance company makes fixed ...
  5. Annuitant

    1. A person who receives the benefits of an annuity or pension. ...
  6. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
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  1. Are variable annuities protected from creditors?

    Whether your variable annuity is protected from creditors depends on the state in which you live. About three-quarters of ... Read Full Answer >>
  2. Are variable annuities tax deferred?

    Variable annuities are tax-deferred. This means an investor does not pay taxes on the interest income from his annuity until ... Read Full Answer >>
  3. Do variable annuities guarantee returns of principal?

    Variable annuities are subject to the ups and downs of the market, so they do not guarantee returns of principal. To mitigate ... Read Full Answer >>
  4. Are variable annuities guaranteed?

    Because they are market-based, variable annuities do not come with inherent guarantees. Investors, however, may purchase ... Read Full Answer >>
  5. Are variable annuities safe?

    As of October 2015, many life insurance companies, and those companies that sell variable annuities, have experienced economic ... Read Full Answer >>
  6. Are variable annuities a good retirement investment?

    There are many financial advisors who advise against variable annuities because of high fees and low returns. Still, some ... Read Full Answer >>
  7. How are variable annuities regulated?

    The sale of a variable annuity is regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory ... Read Full Answer >>
  8. How safe are variable annuities?

    Life insurance companies are facing a challenging environment. Those that sell variable annuities have been able to mitigate ... Read Full Answer >>
  9. What are the risks of annuities in a recession?

    Annuities come in several forms, the two most common being fixed annuities and variable annuities. During a recession, variable ... Read Full Answer >>
  10. What is a longevity annuity?

    A longevity annuity is an investment contract with an insurance company designed to address the potential financial problems ... Read Full Answer >>

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