Compare Annuities
Before you invest, you should compare
annuities that you are interested in against other annuities,
against the benchmark, and also against other investments in
the market. The first comparison you should make is to compare
fixed annuities vs variable annuities. The table below shows
differences and similarities between fixed annuities and
variable annuities.
Comparing annuities
Fixed annuities
|
Variable annuities
|
|
Payments made with after tax dollars.
|
Same. |
| Payments are invested in the
general account. |
Payments are invested in
the separate account. |
| Portfolio of fixed income
securities and real estate. |
Portfolio of stocks, bonds, and
mutual funds. |
| Insurence company assumers
investment risk. |
Annuitant assumes investment
risk. |
| Not a security. |
A security. |
| Guaranteed rate of return. |
Rate of return not guaranteed but
depends on the performance of the separate
investment account. |
| Fixed administrative
expenses. |
Same. |
| Income guaranteed for life. |
Same. |
| Monthly payment never falls below
guaranteed minimum. |
Monthly payments fluctuate
depending on the market and the performance of
the separate account. |
| Purchasing power risk
(inflation). |
Protection against purchasing
power risk. |
|
Subject to insurance regulations.
|
Subject to insurance and securities
regulations.
|
| 
