Annuities Help Alaska AK

Reader’s Question:

I am trying to decide between a fixed annuity and a variable annuity. On the surface they seem pretty similar. Please help me if you can?

Josh

Anchorage, AK

Hello, Josh!

Annuities are gaining in popularity in all the 50 states, including Alaska. An overview of a fixed annuity would indicate that the carrier guarantees the principal and the return of a specified rate of interest. The money invested in a fixed annuity will grow and not decrease. The growth is established by a set formula matched to either an interest rate or a fixed payout. Fixed annuities are subject to regulation by the state insurance department. The investment is safe, the return defined.

Investments in variable annuities are placed in a fund which is a combination of the carrier’s variable life insurance and their variable annuities. The return on the variable annuity is determined by the funds performance. The value of the principal investment can vary as the quality of the funds performs. Variable annuities are performance based. There is some risk but the rewards can be great. Variable annuities are subject to regulation by the Securities and Exchange Commission and by state insurance departments.

Josh, your Missouri agent will be able to help you decide which of these options is best suited to match your plans and future. Whichever way you lean, you will like the tax-deferred consequences of these annuities. Best of luck!