Best Variable Annuities

There are many variable annuities on the market. All major insurance companies have their own best variable annuities. The best variable annuities of one insurance company can differ large from the best variable annuities of another life insurance company. Variable annuities are introduced to keep pace with inflation and unlike fixed annuities, variable annuities pass investment risks to the investor, not the insurance company.

What are the best variable annuities?

There are three primary factors in determining which are the best variable annuities. The first factor is the performance of the separate account and the second is the price and expense of the annuity, the third concerns the riders and options available to add onto the annuity contract.

Performance of Separate Accounts

First and foremost, the best variable annuities have separate accounts that invest in portfolios of the highest return and lowest risks. However, there are three major problems in finding the best portfolio.

1. It is always a risk to invest in an investment portfolio because there is no portfolio manager that is immune to market risks and fluctuations.
2. The choice of investment portfolios and portfolio managers is limited. Not all portfolios are offered in separate accounts of annuities.
3. The flexibility of being able to switch between portfolios or portfolio managers is limited, unlike regular investment accounts.

Administrative Expenses

The best variable annuities should have low administrative expenses. However, insurance companies need to make their money too so the better the annuity is, the higher the administrative expenses, usually but not always.

Riders and addons

Just like life insurance policies, annuity contracts can have riders and addons to customize it to suit the investor or the annuitant. Different annuity companies offer different riders and addons to their basic variable annuities. The best variable annuities should have as many add on as one might want but don't have to have. Because of different riders, some annuity companies offer the best variable annuities than others.