Are Variable Annuities Worth the Gamble

While investing in an annuity might seem like a dangerous and avertable risk, agreeing to make payments to your insurance company might become the wisest financial decision you ever make. One of several types of annuities, variable annuities offer several benefits that you won’t find anywhere else.

The article, What are Variable Annuities?, published on InsuranceAgents.com, examines the significance of variable annuities: “Variable annuities are more than just your basic annuity. The insurance aspect is combined with a mutual fund aspect. Because of the mutual fund component, variable annuities do involve some risk but it is important to remember that variable annuities require long-term investment and the chances are there for a large pay-off in the end.”

As well as a large pay-off, variable annuities provide you with the ability to defer your taxes and pay periodic affordable payments. A death benefit is also included that allows your insurance company to pay out the returns of your investment to the beneficiary of your choosing should an unfortunate circumstance occur.

In order to fully benefit from the perks variable annuities offer, you must first understand that they generally come in two phases: the accumulation and pay-out phase. “The [accumulation] phase of variable annuities involves you making payments to your insurance provider which, in turn, invests those payments into a mutual fund of your choosing,” the article states. “Ask your agent about your various investment options and keep in mind you can move your money from one investment to the other without being taxed.”

The more popular of the two, the pay-out phase is where you start to see the monetary returns of your investment. You can decide whether you want your payment in full or in a series of payments. Since there are a number of fees that may or may not be associated with your annuity, contact your local insurance agent to find out which apply to you.

InsuranceAgents.com pledges that you shouldn’t be skeptical of variable annuities. Instead of assuming the worst, talk to an agent today and have all of your questions answered.

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