What is the difference between solid and variable annuity?

solid and variable annuity are popular tools for reliable revenue stream. The annuity is essentially a contract between the buyer and the insurance company that offers regular payments in return for a flat -rate amount known as the amount of principal. They can be structured so that the payments are fixed, which means that each payment provides exactly the same amount or variable, which means that payments can fluctuate according to market conditions. The buyer's age, the prevailing interest rates at the time of the purchase, the buyer's place of residence and the amount of principal that the buyer turns to the company affects the amounts of payments. When considering the differences between solid and variable annuity, the key factor that determines the amount of payment, the health of the investment portfolio associated with variable annuity. This amount is always the same, regardless of market conditions. Inflation will reduce the purchasing power of a fixed payment over time.

variable annuity is also paid tIf regularly. The difference between regular and variable annuity regular payment is that the amount of payment may vary according to the performance of financial markets or indexes. This gives the buyer the opportunity to obtain larger payments in positive economic conditions when the markets work well. This may also mean that payments are reduced at a time of poor economic performance when markets are trending down. Variable annuity offers a certain warranty that can be arranged to ensure a minimum payment amount regardless of the tears. This can be attractive because the buyers are ensured by a minimum amount for payment with the opportunity for increased amounts of improvement in market performance.

For solid and variable annual structures, the buyers have the possibility to choose a lifelong payment period or a specific time of payment. If a specific payment period is chosen, payments will cease after the allocated amount of years and the conclusion of the contract. In a firm and variably annuity situation, the buyer's death may be selected andLternative recipient. Generally speaking, a fixed payment period provides larger payments than a lifetime payment period, and plans with an alternative recipient provide a lower amount of payment.