Variable Annuity

A long-term contract sold by life insurance companies in which premiums are invested, and future payments to the purchaser are based on the performance of the investment portfolio. If an individual dies before receiving income from his or her variable annuity, the individual’s beneficiaries are entitled to the amount invested in the annuity, regardless of the portfolio’s performance. Usually Variable Annuities are sold by prospectus, which contains complete information on risks, fees and expenses, and should be read carefully.