What Is a Variable Annuity?

Wendy-Swanson-14-What is a variable annuity

Wendy Swanson explains that a variable annuity is an insurance contract with investment options similar to mutual funds, offering growth potential but also risk of loss and higher fees compared to fixed annuities.
Video Transcript

A variable annuity is also an insurance contract that you're going to have. The difference between a variable annuity and some of the other annuities out there are. It has the ability for you to lose money because you are. This is a true investment vehicle that you're in.

It would have, you know, subcategories of investment options, much like a mutual fund. And there's going to be fees associated with the variable annuity that you're not going to find on the fixed side of this. Now why do people like variable annuity? Well, you know, you have some significant upside potential in the returns.

But just like with any other investment, you also will have to see that downside if or when the markets were to tumble.