| Print this page

Did You Know?

That in 2008, the total average expense difference between variable annuities and mutual funds was 1.18%
That, as of the fourth quarter 2008, the combined net assets of U.S. variable annuities were valued at $1.2 trillion?
In 2008 fixed annuity assets valued at 556 billion a 9% increase from 2007?
In 2009, the contribution limits range from $5,000-$6,000 for an IRA, $16,500-$22,000 for a 401k and $200,000 plus for a non-qualified annuity?
That the average number of funds per variable annuity contract was 51, in 2008 with an average contract value of $49,200?

Consumers

Tools to Assist in Your Investment Decisions

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.

<< Return to previous page