Course 401: Variable Annuities
What's a Variable Annuity?
In this course
1 Introduction
2 What's a Variable Annuity?
3 Fixed Immediate Annuity
4 Fixed Deferred Annuity
5 Variable Annuity
6 Equity-Indexed Annuity

All annuities are contracts with an insurance company, whereby you pay in with the understanding that the company will send you a stream of income. But that's where the similarities end and an often-bewildering parade of features and benefits begins.

You can choose to receive the income within the first 13 months of your contract (an immediate annuity) or at some point in the future (a deferred annuity). With a fixed annuity, you earn a predetermined rate of interest on your investment. If you invest in a variable annuity, you'll have control over how your assets are invested, and the size of your account will vary based on how those investments perform.

Equity-indexed annuities, which have grown in popularity in recent years, promise to be kind of a hybrid between a variable and fixed annuity. They allow you to earn returns that are higher than you'd be able to get with a fixed annuity but provide a measure of downside protection not available with a variable annuity.

Here's an overview of some of the key annuity types, as well as the pros and cons of each.

Next: Fixed Immediate Annuity >>


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