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Which Type Is Right for You?: Deferred Variable Annuities

Get the lowdown on a deferred variable annuity, and see if it's the right fit for you.


An investment product that allows you to participate in stock-market gains while protecting against losses.

How it works:

You invest in mutual fund-like accounts and an insurance company guarantees future payouts, regardless of market performance.

Typical investor:

Preretirees who want to grow their nest egg without fear of scrambling it.


Complicated product with ongoing fees averaging a steep 3% per year.

Potential to increase your account value if market performs well.

If market tanks, you can withdraw about 5% of guaranteed balance each year.

Flexibility to cash out your investment after surrender period expires.

To see if an immediate fixed annuity is a better fit, read Which Type Is Right for You?: Immediate Fixed Annuities.