Definition of "Variable Annuity"

A type of annuity in which the account balance may fluctuate based on the value of investment portfolios underlying the separate account. The contract owner has the ability to allocate money among several available investment choices. The contract owner, not the insurance company issuing the contract, assumes investment risks. An annuity that lets you invest your money among various investment portfolios, called subaccounts. The performance of the underlying investments in those portfolios determines the value of the variable annuity (less any applicable fees). A contract in which the premiums you pay are invested in bond and stock funds. Your selection of funds depends on the level of risk you want to assume. The account value reflects the performance of the funds you select. Over the long-term, variable annuities invested in equities generally reflect the growth and performance of the economy and can serve as a hedge against inflation.

An insurance annuity contract offering both variable and fixed-rate investment options. The return on investment in a variable option is not fixed but fluctuates with the market.

A type of annuity that allows the annuitant to select a number of different investment alternatives. The annuity proceeds are separated from the investments of the insurance company and are placed in a separate account. The insurance company accepts the mortality risk for the annuitant and guarantees payments for life once the contract is annuitized. Unlike a fixed annuity, the annuitant accepts the investment risk not the insurance company. These products can only be sold by registered representatives