A variable annuity is an insurance contract that delays payments of income (periodic or systematic withdrawals, or payments as an annuity) for the investor chooses to receive them. This type of annuity has two main phases, the savings phase in which you invest money in the account of income and the phase in which the plan becomes income payments are received. Earnings in the contract and deferred tax is levied on the withdrawal of the tax rate on income (similar to qualified retirement plans) and plans to share with the 10% penalty for early withdrawals before 59 and 1 / 2. If income is held in a pension plan, which is known as a "qualified" annuities and distributions are fully taxable. If the income is bought in the liability account, which is known as "unskilled", and only the income variable annuity are taxed. Variable annuity withdrawals are made on a first principle of compensation, the last.
Variable annuities come with a variety of insurance options, adding to the cost of investment in the contract. These warranties are subject to the continuing demands for payment of insurer solvency