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Swiss Variable Annuities
What is a Swiss Variable Annuity?
Swiss variable annuities offer investors a wide range of options. Purchasing a Swiss variable annuity is akin to investing in stocks or a mutual fund. The return on the investment is dependent on the performance of the investment options selected by the policy owner. However, Swiss variable annuities also offer additional asset protection benefits.
How Do Swiss Variable Annuities Work?
There are two phases to a Swiss variable annuity: an accumulation phase and a payout phase. During the accumulation phase, money is deposited into an account and distributed among different investment options. Investors can purchase an annuity in a single payment or make additional payments over time.
Depending on the type of Swiss variable annuity purchased, payments will either begin immediately or at a future date. Investors decide how often they want to receive these payments and how long they want them to last. These factors (as well as the performance of the variable annuity) determine the size of the periodic payment.
Who Should Invest in Swiss Variable Annuities?
Swiss variable annuities are designed to meet long-term retirement and financial goals. It is advisable to let the account grow untouched for the first year because of the taxes insurance companies may charge for withdrawals within that period.
Because of their long-term growth potential, Swiss variable annuities are excellent options if you are planning for retirement. Variable annuities also safeguard you from outliving your assets because income payments are guaranteed for life. This guarantee can even be extended to last the duration of your spouse’s life.
Advantages of Swiss Variable Annuities
In addition to protecting retirees from outliving their assets, Swiss variable annuities offer two more distinct advantages. Most Swiss variable annuities contain something called a death benefit. If the policy owner dies before the insurer has started making payments, his or her beneficiary is typically guaranteed to receive at least the amount of the purchase payment(s). If the insurer has already disbursed payments, most Swiss variable annuity policies guarantee that the beneficiary will receive at least the amount of the purchase payment(s) minus the money already disbursed.
Like other Swiss annuities, variable annuities are tax-deferred. Policy owners pay no taxes on the annuity or any profits it may accrue until money is withdrawn from the account.
