8 things investor attorneys need to know about variable annuities – Find out more here!


Variable annuities are a key part of the agreement between yourself and an insurance company. If you are confused as to what this is or how to use your investment accounts, consider using an investor attorney to help you with the decision-making process.

8 things that are a must-know about variable annuities – key info here!

If you are going to become an investor attorney, you need to know the basic facts about variable annuities so you can succeed in the industry. But where is the basic must-know info that will help you succeed and show your prowess? Let’s see some of the most common facts about variable annuities that are must-know for attorneys to effectively do their job.

What are variable annuities?

The most logical question regarding variable annuities is – what are they? Simply put, a variable annuity is a business contract/agreement between a person and an insurance company. During this agreement that is put down on paper via a contract, the insurer will collaborate with the person to state when they will make payments to you – if they owe you money. The insurance company will pay the person pre-set payments – either to be made immediately or in the future – these payments are used as investments that are essential for each individual to pay for protection and guarding of assets. Typically, variable annuities are invested in certain spaces – the most commonplace for an individual to invest variable annuities is within their mutual funds.

Are variable annuities different from mutual funds?

Although variable annuities typically are invested within mutual fund accounts, there are key differences between mutual funds that investors need to know before putting their money aside for safety.

  • variable annuities provide specific payments during regular intervals for the duration of a person’s life. If you want to get variable annuities for your loved one’s life, then you can do so for the duration of the person that you choose. Make sure you keep this in mind when choosing your investment opportunities – using variable annuities prevents you from the possibility of potentially living longer than you would have financial freedom. For example, if you use other investment methods, you can potentially live longer than your assets will last – leaving you without money.
  • Secondly, there are death benefits associated with using variable annuities. If you or the person who has been insured becomes deceased before the insurance company starts to pay you during the preset intervals, the person who is your next of kin or beneficiary will earn the payments – this means that no matter what, someone in your family will get the “profit” and earn payments from your life.
  • Lastly, you can tax defer your variable annuities – for those who are new in the technical world, this simply means that you will not have to pay minimum taxes on your income from the variable annuities payments.

What is the accumulation phase?

Another question that investors will have regarding variable annuities is the accumulation phase. The accumulation phase is the part where the user will have to make certain payments that contribute to investments in the future. If this is confusing to users, don’t worry – it is confusing to us as well! Simply put, you can assign a certain percentage of your payments to investment options, such as stocks or bonds. This way, you can distribute money to funds that will let you make more money over time.

What is the payout phase?

If you are having concerns and questions about variable annuities, it can be helpful to ask your investor attorney about the payout phase. This is the second phase after the accumulation phase where you can receive any asset and funds that you can earn via lump sum or at preferred intervals. If you do not want to get all of the one at one point, you can benefit from the monthly payment to help you accurately save your money.

If you are one of the people who decide to receive monthly payments instead of one lump sum, you can choose the time that helps you for your payments, such as for 10 years, 20 years, even more! You can decide the length of the payment period to give you an idea of how long you will get assets and funds. Therefore, you can customize your own payout phase to help you invest safely and smartly.

What is the death benefit?

If you are confused about the death benefit associated with the variable annuities, it can help you to ask your investor attorney about this detail of the vanities. Typically, the death benefit is the process of choosing someone who will receive the money in your account. For example, if you’re getting older and you need to come up with a beneficiary of your money, you may decide to have your assets and minimums distributed among your children.

What are surrender charges?

Another aspect of variable annuities that you should keep in mind is the variable annuity charges. What are the charges associated with your account and why should you know what they are? Basically, the surrender charge is a key fee that you need to keep in mind when you are using variable annuities. If you decide to take out money from your variable annuity account within 10 years of purchase, you may find that you will have to pay an early release fee, known as the surrender charge.

What are higher mortality charges?

The last charge that you should keep in mind when you are using variable annuities is the higher mortality and expense charges. These types of risk charges are usually regarding the bonus credit that you can earn from your account – you need to decide if the risks of investing are worth it for you and your financial situation.

What are some of the most common questions you should ask before investing?

If you are working with an investor attorney, you need to ask the investor in question before moving forward. But what should you ask them? Some of the most common questions to ask your investor attorney are the polling questions:

  • What are additional features of variable annuities that I should know?
  • Can I use the variable annuities to save for retirement?
  • What are the extra fees and expenses associated with the variable annuities account that I need to pay?


As you can see, working with an investor attorney is key to learning more about variable annuities so you make smart financial decisions moving forward!

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