variable annuity investment & finance definition
An
annuity in which the payment depends on the performance of the underlying
investments. An annuity is an
investment product sold by an insurance company that guarantees a minimum
return to the annuitant. A variable annuity contrasts with a fixed annuity, in which the insured knows
exactly what return he or she will get, and the insurance company bears all the
investment risk.
See variable annuity in Wall Street Words
An annuity with payments to the annuitant that vary depending upon the investment success of a separate investment account underlying the annuity. Because the invested funds are primarily in common stock, this annuity offers greater potential rewards and greater attendant risks than annuities supported by fixed-income securities. Compare
fixed annuity. See also
hybrid annuity.
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