A Variable Annuity is a type of long-term retirement account, which is generally utilized for three different purposes:

1. Tax-deferral
2. Guaranteed Retirement Income (subject to claims-paying ability of insurance company)
   
3. Guaranteed Minimum Death Benefit
   
   

Tax-Deferral: For investors who seek tax-deferred growth on investment returns, variable annuities may meet this objective.  But a variable annuity is a long-term, retirement account, and the trade-off for the tax-deferred growth is the fact that withdrawals prior to age 59 ½ from a variable annuity may be taxed and assessed with a 10% IRS penalty.

Guaranteed Retirement Income: Through our experience, the majority of our clients who utilize a variable annuity do so in order to guarantee future or immediate retirement income.  Due in large part to the recession from 2000-2002 and the Great Recession of 2008-2010, investor concern over negative market performance has led clients to seek products that offer guaranteed retirement income.  By adding an optional guaranteed income or withdrawal rider to a variable annuity, investors may be able to mitigate the risk of running out of money in retirement.  But it should be noted that guaranteed income riders do not protect against loss of principal and withdrawals that exceed the provisions of the guarantee can negate it's intended benefit.  Variable annuities will fluctuate and may lose value.

Guaranteed Minimum Death Benefit: Some variable annuity contracts provide for a guaranteed minimum death benefit to beneficiaries.  For example, a married investor contributes $100,000 to her variable annuity at the height of the bull market in the late 1990s.  In 2002, at the worst of the bear market, she passes away.  At the time of her passing, due to negative market performance the variable annuity is only worth $50,000.  The client’s husband, upon her death, receives a check in the amount of $100,000 from the variable annuity company.  Generally speaking, a guaranteed minimum death benefit on a variable annuity contract is equal to the amount deposited, minus any withdrawals.

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PLEASE READ:
Investors should consider the investment objectives, risks, charges, and expenses of a variable insurance contract and sub-accounts carefully before investing. The prospectus contains this and other information about the variable insurance contract and its sub-accounts. You can obtain prospectuses from your financial representative. Read prospectuses carefully before investing.