When To Buy A Variable Annuity? 
A variable annuity has features that make it an attractive purchase . A variable annuity is often seen as a hedge against the ravages of inflation . The time to buy a variable annuity is when you want to establish a long term savings program . Normally the objective of the program would be to accumulate money for retirement . You would consider a variable annuity if you were dissatisfied with the return offered on other annuities . The final consideration is to evaluate your risk tolerance to determine if a variable annuity is the correct contract for you . In order to purchase a variable annuity you must deal with a registered representative who holds a variable annuity license in your state . This agent receives additional supervision for your safety . This agent will provide you with a prospectus for any fund available in the variable annuity The primary feature or a variable annuity is that the contract is an annuity . An annuity can provide an income that you can not outlive . This feature can be different in various variable annuities but the fact that a lifetime income is available is extremely important . Another feature that would make a variable annuity attractive is that there isnt any taxation on gain during the accumulation period of the annuity . The gain is reinvested inside the annuity and this compounding effect is very important . A variable annuity unlike other annuities is not based upon interest , rather it is based upon the performance of underlying investment accounts which you may tailor to suit your specific needs and interests . You are normally granted the right to transfer between investment options without triggering income taxes . Many of these transfers also avoid any fees . There are risks associated with investing in a variable annuity , including loss of principal . A variable annuity is flexible . It can be changed throughout the accumulation period to meet your specific requirements . You risk tolerance can change over time . The variable annuity will allow you to change the mix of investments held by the variable annuity . If you become apprehensive about the market , there is almost always a fixed account to provide steady interest without fear of loss . There are fees associated with a variable annuity that are not always found in other annuities . These fees reflect the fact that the value of the annuity is invested , rather than merely earning interest . There are opportunities in most variable annuities to shift from fund to fund and to shift from variable funds to fixed funds . Normally there arent any fees for this service . Like most annuities surrender fees may be applicable . This is because of the long term nature of the contract and can be understood when compared to the early withdrawal penalties that are a part of certificates of deposit . These surrender fees are often waived in the event of disability . Like other annuities the variable annuity allows you to select a beneficiary . Many variable annuities provide for a guaranteed minimum death benefit that provides some safeguards for your family should you retire before you retire . The death benefit from the annuity would pass by contract to the beneficiary in the event of death avoiding probate expense and delay . Many variable annuities will return the amount of deposits as a death benefit should the value of the annuity be less . 