7.8 Comparing Variable Annuities and Fixed Annuities
Variable annuities and fixed annuities are similar to some extent and different in other respects.
Similarities
- Retirement income is their primary purpose.
- Purchase methods are the same.
- They have the same types of annuity options.
- They have the same concept of accumulation and annuity periods.
- Partial surrender provisions are the same.
- The guarantees of expense and mortality are alike.
Differences
- The variable annuity holds no guarantee of the principal, interest, or the amount of payment.
- The variable annuitant bears the investment risks.
- Variable annuities are regulated by both the state and federal governments.
