Variable Annuity

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Variable Annuity An annuity is a contract between you and an insurance company in which you make a lump-sum payment or series of payments and, in return, receive regular disbursements, beginning either immediately or at some point in the future. A variable annuity is a contract between you and an insurance company. It serves as an investment account that may grow on a tax-deferred basis and includes certain insurance features, such as the ability to turn your account into a stream of periodic payments. You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments. Variable annuity is different from fixed annuities in that, fixed annuities provide a guaranteed return. Variable annuities offer the possibility of higher returns and greater income than fixed annuities, but there is also a risk that the account of a variable annuity will fall in value. The benefit of variable annuities is that it give the contract holder periodic payments for the rest of his or her life, which protects against the possibility of outliving other assets. Variable annuities are also tax-deferred investments, so you pay zero taxes on any income and gains from the annuity until you withdraw the money. An annuity is a series of payments made at equal intervals. Examples of annuities are regular deposits to a savings account, monthly home mortgage payments, monthly insurance payments and pension payments. Annuities can be classified by the frequency of payment dates. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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