The investment options in an annuity depend on the insurance company offering the product. The investment options are generally limited, however.
If you decided on a Fixed Annuity, the insurance company agrees to pay you a fixed percentage for a set period of time – the rest is completely handled by the company. Usually, this percentage is higher in the beginning (teaser rate), and might go down periodically.
A Variable Annuity, on the other hand, allows you to decide how to allocate your money between the “separate accounts” they offer, which are basically their institutional versions of mutual funds. However, you are responsible for all fluctuation of your purchased investments, and whether you gain or lose. They will typically offer help in creating an allocation, but their methods may be oversimplified.
For additional help, we encourage you to use the resources here at Tickeron.
Indexed annuities are another thing.
They are not variable products but do allow the investor to choose between several types of indexes in which they would like to participate, and they may also give investors a choice of how they would like to try to capture the gains in these indexes, such as point-to-point.
Indexed annuities have more moving parts and are harder to understand than many investment vehicles on the market, and we encourage you to find trustworthy help and to do your own research if you decide to use one.
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