The effects of recent tax-law changes, which would expire if Congress does not renew them, may cause people to be less keen about variable annuities
, but those nearing retirement may find great value in the new risk-management tools.
require a careful analysis of fees versus the potential benefits.
27% in insurance and money management fees on variable annuities
, while the average mutual fund charges only 1.
and mutual funds often compete for the same investment dollars because, like a "family" of mutual funds, a variable annuity allows the holder to invest in a similar range of professionally managed securities portfolios.
The Perspective Family of Variable Annuities
(VA210, VA220, VA250, VA410) and Jackson's Retirement Latitudes Product (VA 310) are issued by Jackson National Life Insurance Company, Lansing, MI, and distributed by Jackson National Life Distributors LLC, member NASD.
TIAA-CREF also had the assurances of college and university leaders that they would accept use of stocks in pension plans and would amend those plans so participants could invest in variable annuities
Also, there is a large body of literature supporting the use of variable annuities
as the investment vehicle of choice in net income make-up charitable remainder trusts, to ensure that there is no accidental income.
Glenn Daily, a fee-only insurance consultant in New York, says that expenses are higher with variable annuities
than typical mutual funds because of the additional 1% to 1.
This allows investors the flexibility to take income at the earliest age that withdrawals are typically taken from variable annuities
and many retirement plans without a tax penalty.
Given the examination findings, the large number of enforcement cases over the past couple of years and the complexity of these products, we feel we can best protect investors by establishing stronger, more specific rules that apply specifically to variable annuities
," NASD Chairman Robert Glauber said in a statement.
Preliminary data in the study "Variable Annuities
: An Industry in Transformation" by Conning Research & Consulting, show the individual annuity industry returned a profit of $7 billion in 2003, primarily due to the swing on variable annuities
NYSE: PNX) and National Life Group have formed a strategic alliance to increase the sales of Phoenix's variable annuities
and offer National Life Group's affiliated Sentinel Variable Product Funds in more variable products.