What is the definition of Variable Annuity?

A Variable Annuity is an annuity where the income payments or the contract value is based on how well the selected investment instrument performs. These investment instruments include bonds, stocks and securities that are selected by the contract owner. With excellent investment management, the value of the annuity has the potential to increase with time and can provide a very attractive rate of return for the owner of the annuity.

Variable annuities enable the annuity owner the benefit of tax-deferred growth of its investment earnings, as well as a death benefit that the beneficiary will receive. The death benefit may be a minimum guaranteed amount, or the current value of the annuity, whichever is greater.

There is also an option for the annuity owner to get the income payments for a specified length of time, or to tie it to his lifetime or the lifetime of the spouse.

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