| an annuity in which the premiums are invested chiefly in common stocks or other securities, the annuitant receiving payments based on the yield of the investments instead of in fixed amounts. |
| variable annuity n. An annuity in which payments to the annuitant vary according to the changing market value of the underlying investment. |
Variable Annuity
An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio.
Investopedia Commentary
The portfolio generally invests in equity securities and its performance determines the amount of this total payment.
Related Links
Anything But Ordinary: Calculating The Present And Future Value Of Annuities
Getting the Whole Story on Variable Annuities
Passing the Buck: The Hidden Costs of Annuities
Should You Exchange Your Variable Annuity?
See also: Annuity, Deferred Annuity, Fixed Annuity
Also spelled: Variable Annuities
variable annuity