Fixed, Variable Annuities and Other Investments
| Product Type |
Principal Guaranteed? |
Rate Of Return Guaranteed? |
Liquidity |
Contract Charges |
Earnings Tax-Deferred? |
| Fixed Annuity |
Yes by insurer |
Yes by insurer |
10% of premiums per year without charge. Otherwise, penalties apply.** |
Yes |
Yes* |
| Variable Annuity (without a fixed-interest account) |
No |
No. Risk of loss, including principal. |
10% of premiums per year without charge. Otherwise, penalties apply.** |
Yes |
Yes* |
| Federally-Insured Bank CD |
Yes, by federal
agency, (subject
to maximum
amounts) |
Yes, by bank |
No |
No |
No |
| Stocks |
No |
No. Risk of loss, including principal. |
Yes. No penalty, but sales commission may apply |
No |
No |
| Mutual Funds |
No |
No. Risk of loss, including principal. |
Yes. No penalty, but sales commission may apply. |
No |
No |
*When purchased to fund a tax-qualified retirement plan, there is no additional tax deferral to that already provided by the plan.
**Because annuities provide tax deferral benefits, withdrawals prior to age 701/2 may be subject to tax penalty.
