Variable Vs Fixed Annuity

Fixed annuities offer less risk and guaranteed rates of return in exchange for lower rates of return.

Variable vs fixed annuity. A variable annuity fluctuates with the returns on the mutual funds it is invested in. The primary distinction between a fixed and variable annuity is that the return on a fixed annuity is fixed. A fixed annuity guarantees payment of a set amount for the term of the agreement.

Market volatility or company profits dont affect the interest rate on a contract. But if youre considering. Fixed annuities offer a fixed interest rate.

Fixed and variable annuities are types of deferred annuity contracts. In a fixed annuity the insurance company guarantees the principal and a minimum rate of interest. This differs from a fixed annuity which offers a guaranteed interest rate regardless of what changes may occur in the market.

The insurance company pays a fixed rate of return and absorbs any market risk. It also fluctuates based on changes the market may experience over time. Variable annuities potentially provide for larger gains but do not protect against the downside including loss of principal.

Variable and fixed annuities both have surrender charges. According to Suze Orman a variable annuity is continued below video. The growth of the annuitys value andor the benefits paid may be.

Fixed annuities may be a good choice for. Fixed and fixed-indexed annuities often have market value adjustments during the surrender period. The key feature of a variable annuity is that you can control how.