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Retirement Planning

Benefits of variable annuities

Are your clients considering a variable annuity? It’s important for clients to understand that variable annuities are a type of deferred annuity and that the money invested is intended to grow for a while before providing any payout. But while variable annuities come with greater investment risk, there are also benefits clients should know such as potential for greater earnings compared to other types of annuities. 

Five benefits of variable annuities to share with clients:

1. Funding options

A variable annuity can be purchased with a one-time payment or with a series of payments based on your need and terms of the annuity contract.

2. A variety of investment options

Earnings and losses in a variable annuity are based on performance of investment subaccounts with investments ranging from stock and bond funds to money market funds.

3. Guaranteed death benefit available

Variable annuities typically offer the option to select a guaranteed death benefit, for an additional cost, to ensure your beneficiaries will have a minimum payout even if the annuity loses value.

4. Opportunity for tax-deferred growth

A variable annuity can grow your retirement savings tax-deferred. You’ll pay taxes when you receive the money as income.

5. Options to guarantee income for life

As with other annuities, you can typically structure payments to guarantee you won’t outlive this income stream.

Is a variable annuity the right option for your client? 

Clients should keep their goals and risk tolerance in mind as you help them decide whether a variable annuity is right for them. 

Here are four questions you can ask:

  • Is your client willing to accept greater risk for the potential for greater growth?
  • Do they want more variety in their investment and retirement portfolio?
  • Are they looking for options to guarantee an income stream they can't outlive?
  • Can they tolerate the reduced liquidity of their investment during the contract's surrender charge period?

The benefits listed above can make annuities an effective part of your client’s retirement plan. You can help your clients understand the basics of annuities and the role they can play in their retirement planning.

Clients worried about the stigma of annuities? Learn more about how you can address those concerns.


As clients determine what annuity might be right for them, they should remember that annuities are intended as vehicles for long-term retirement planning, which is why withdrawals reduce an annuity’s remaining death benefit, contract value, cash surrender value and future earnings. Withdrawals from annuities may also be subject to income tax and, if taken prior to age 59 ½, an additional 10% IRS tax penalty may apply. Because Protective and its representatives do not offer legal or tax advice, it is important that clients talk with their own legal and tax representatives about their specific tax situation.

Investors should carefully consider the investment objectives, risks, charges and expenses of a variable annuity, any optional protected lifetime income benefit, and the underlying investment options before investing. This and other information is contained in the prospectuses for a variable annuity and its underlying investment options. Investors should read the prospectuses carefully before investing. Prospectuses may be obtained by contacting PLICO at 800.265.1545.

Variable annuities issued by Protective Life Insurance Company (PLICO) Nashville, TN, in all states except New York and in New York by Protective Life & Annuity Insurance Company (PLAIC), Birmingham, AL. Securities offered by Investment Distributors, Inc. (IDI). IDI is the principal underwriter for registered insurance products issued by PLICO and PLAICO, its affiliates.

Product guarantees are backed by the financial strength and claims-paying ability of the issuing company.

Annuities are not a deposit, not insured by any federal government agency, carry no bank or credit union guarantee, are not FDIC/NCUA insured and may lose value.



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