Choosing the Best Variable Annuity Plan to Invest In: 5 Important Factors to Consider

bulram | December 27, 2012

Choosing the Best Variable Annuity Plan to Invest In

People are always researching new investment options available to them. Among the several choices, variable annuity investment is one of the best choices to consider since they offer a stable return as interest income. However, the return rates may vary from one year to another, which is the reason it is known as variable or changeable annuities.

Investing in variable annuities is a long-term investment option that can give you a stable income stream and a lifelong saving choice. There are many such annuity plans offered, but not all are the same. Thus, it is needed to know how to choose the best variable annuity plan to invest in, and the important factors that need to be considered.

Flexibility: Since the interest rate changes annually, there are chances that it drops below a particular level where you are content with your investment. Here, a flexible changeable annuity comes in useful. Investors have the choice of altering their investment plan, but only if the firm provides subaccounts. So, ensure this before opting for a plan.
Ratings: The firms that give variable annuities are assigned ratings for financial strength depending on their performance in the past years. These scores are the best way to decide the company’s competence. Furthermore, the firms that get the highest scores are those that pay the returns instantly. There are few firms that are not reputed when it comes to paying claims. So, it is very important to decide on the company after considering these ratings.
Retirement: All changeable annuities are devised to prove to be beneficial to you after retirement. However, you have to research as many plans as possible so as to check if there are any beneficial offers for retirement. Check if your variable annuities can be put in a retirement account. This ascertains that you have a stable income after retirement. If retirement benefits are available, make the variable annuities scheme ideal for you.
Expenses: There aren’t any insurance companies that offer changeable annuities for free. There are specific expenses and charges that have to be borne by you so as to avail their services. The charges are classified under various categories and change from one company to another. Thus, you should check the charges levied by different companies so as to make the correct decision.
Withdrawal: It is good to hold your investment for the complete duration, but a situation can come wherein you may be forced to withdraw. So, you have to look out for a plan where the process of withdrawal is simple. Few firms have a very complex process to go through for withdrawal and they also charge some amount of fee in addition to suitable taxes for withdrawing early.

On the whole, when determining the best variable annuity, focusing closely on the details and exploring the prospectus for various contracts will assist the investor to take the best decision. The above five factors can help you decide on the variable annuity that is the best pick for you.
Author Bio:

Investment is the order of today and Robin makes sure your efforts do not find a vague end. Starting from stock to annuity investment, he has everything in his urn of options for you.