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Did You Know?

That, as of the first quarter 2011, the combined net assets of U.S. variable annuities were valued at nearly $1.6 trillion, an 11% increase from first quarter 2010 and the highest level ever recorded?
In 2010 fixed annuity assets were valued at $659 billion a 6% increase from 2009?
That in 2010, the total average expense difference between variable annuities and mutual funds was 1.01%?
In 2011, the contribution limits range from $5,000-$6,000 for an IRA, $16,500-$22,000 for a 401(k) and $200,000 plus for a non-qualified annuity?
That the average number of funds per variable annuity contract was 50 in 2010, of which 47% of assets were invested in equities, 11% in bonds, and 20% in fixed-rate accounts?
That the guaranteed lifetime withdrawal benefit was offered on 79% of variable annuities in 2011 and was elected by 65% of contract holders?
Boomers who own annuities have a higher confidence in retirement expectations, with 92% believing they are doing a good job in preparing for retirement?

Advisors

High-Level Professional Resources

How is a Variable Annuity Different from a Mutual Fund?

01.01.2009

Both variable annuities and mutual funds offer professional money management and diversification of assets. The main difference between the two is the annuities provide insurance benefits that funds don't have.

For example, many annuities provide that if you agree to keep your money in the annuity for a specified period of time, usually seven to ten years, the insurance company guarantees that at the end of that time, the value of your account will be at least equal to the amount of money you invested. Of course, if the value of your account went up, you would get the higher amount. Other annuities guarantee the systematic withdrawal of a certain percentage of premiums annually, regardless of actual performance or account value. So if you want protection against downside market risk, an annuity can be a good choice. In addition, only annuities offer income options than can guarantee payments in retirement that will last for life.

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