- A type of annuity where investors place funds into an insurer's "separate accounts" (also known as "subaccounts") during the accumulation phase of the annuity and receive payments from the insurer in the income phase. The insurer invests the pooled funds of multiple investors into a portfolio of stocks, bonds and other securities. While the payments received by the annuitant in the income phase vary relative to the performance of the insurer's investment portfolio, most variable annuities guarantee a certain minimum rate of return..
variable annuity payout
Related Terms and Acronyms
- Fixed Annuity — Definition,
- An annuity that makes fixed payments to the annuitant with guarantees for earnings and principal.
- Hybrid Annuity — Definition,
- An annuity with both fixed and variable annuity elements.
- Indexed Annuity — Definition,
- An annuity where investment performance is pegged to a stock index.
- Inflation-Protected Annuity — Definition,
- An annuity that guarantees a return equal to or above inflation.
- Single Premium Variable Annuity (SPVA) — Acronym,
- Split-Funded Annuity — Definition,
- Two annuities purchased together, one with a deferred payout and the other with an immediate payout.
- Variable Annuity Guaranteed Living Benefits (VAGLB) — Acronym,
- Wraparound Annuity — Definition,
- An annuity that allows the annuitant to control how funds in the annuity are invested.