A communication about a variable annuity emphasizes the liquidity benefit of being able to withdraw funds at any time. This must be balanced by a description of tax liabilities, charges as well as penalties on withdrawals.
The term variable annuity refers to a type of annuity contract, whose value can vary based upon the performance of the underlying portfolio sub accounts. These sub accounts as well as mutual funds are conceptually identical, but sub accounts do not have ticker symbols that the investors can easily type into a fund tracker in order to do research.
In case of annuities, there is a difference between variable annuities and fixed ones, where the latter provide a guaranteed and fixed return.
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