Insurance Plans 135 views August 22, 2020

What is a Variable Annuity Plan?

Everyone knows that the future is unpredictable so it is better to be prepared for the future. There are some individuals who prefer an annuity insurance plan to secure their life after retirement. On the other hand, the annuity plans give you an income for a specified period of time after your retirement that is known as the payout term. But at the time of inception of the policy, you will have to decide the type of annuity plan you are willing to take. There is a variable annuity plan in which your income during the payout term remains variable. Your investments are invested in the market and you will get a return according to the market. So let’s explore the benefits of the variable annuity plan.

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Advantages of the Variable Annuity Plan

Here are some of the advantages of a Variable Annuity Policy that will help you to understand the plan better.

  1. Death benefits
  2. High Returns
  3. Long Investment Plans
  4. Regular Income
  5. Tax Benefits
  6. Multiple Payout Modes
  7. Tension-Free Retirement

Death Benefits

The variable annuity plan includes death benefits. If in case you die before the starting of the payout term then the nominee is entitled to take the death benefits. The company will pay the death benefit to the nominee in case of unfortunate death of the insured.

High Returns

These plans usually have a high return on investment. But on the other hand, they also include high-risk because your money is invested in the market to yield high returns and there are some chances of a loss as well. So, you will have to take some risk for a high return.

Long-Term Investment

If you are investing in the variable annuity plan and want high returns then you must buy the annuity for the long term. Most of the people take a deferred annuity while they are choosing the variable annuity plan because the accumulation phase is long.

Regular Income

In this plan, you will receive a regular income after your retirement but the amount of the income will not be the same. The income for every month will vary as per the market conditions. But you will receive a regular income during the payout term from the company.

Tax Benefits

You will not have to pay any tax on the gains in this insurance plan. You will be liable for the tax when you make a withdrawal from the annuity or start receiving the payout. There will be no tax deductions during the accumulation phase unless and until you make a partial withdrawal.

Multiple Payout Modes

There are multiple modes for receiving the payouts from the company in the variable annuity plan. The company allows you to take the payout as a lump sum or in installments. The installments can be on a monthly basis, yearly basis, and quarterly basis.

Tension-Free Retirement

Most of the individuals are concerned about their retirement how they will manage their lives. So, an annuity plan can help you to live a happy life after your retirement. You will receive a regular income so that you can manage your expenses.

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