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>  Receive Stable, Monthly Income forLife
 >  Limit Market Risk & Retire with Confidence
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As a unique investment opportunity, Variable Annuity attracts some charges.  You need to know more about them before you think of investing.  Several insurance companies in the US have come into the business. There’s every need for you to be properly enlightened before you sign any kind of annuity contract with any of the insurance companies.

In most cases, the charges reduce the value of your account in the Variable annuity plan. They can also reduce the value of your investment returns. You need to know more about such charges.  Let’s examine them now.

•             Surrender Charge

This is the fee you pay when you want to withdraw money from a Variable annuity within a certain period. In most cases, the charge comes after purchase payment has been made up to 6 to 10 years.  Your insurance company   issues   surrender charge as part of commission they require. It’s also known as sales charge. It’s normally used to pay a commission to your financial professional for selling the Variable annuity to you.

The Surrender Charge is simply a percentage of the amount you withdraw.  It normally comes down as the years roll by.  The declining period is usually known as “surrender period”.

•             Mortality and Expense Risk Charge

This is a kind of charge that amounts to a certain percentage of your account value.  Your insurance company uses the charge to compensate itself for the insurance risks it passed through while the annuity lasts.  The gain made from this charge is also used in paying your insurer’s cost of selling the annuity.  This may include the commission paid to your financial professional for selling the annuity to you.

•             Administrative Fees

This can also be known as handling fees.  Your insurer deducts the fees to cover the period of record keeping while the Variable annuity lasts. The fees also cover any other expenses made   during the period of administration.  In most cases, the charge may be a flat maintenance fee for your account. It’s not much. It   ranges as from $25 to $30 per annum.

The above charges are the basic fees you’ll always come in contact with when you go for a Variable annuity.   However, there may be other underlying fund charges, which may spring up.  They are part of the charges that come with some mutual funds which you may be interested in.  Such fees are usually deducted indirectly.

In addition, other special charges come with various features of Variable annuity.  Some of the charges may be attached to death benefits, guaranteed minimum benefit, and longer-term care insurance and so on. They are likely to attract some fees based on the prevailing condition that may apply.

In any case, there’s always the need to   work with reliable insurance company when searching for variable annuities.  Some of the insurance companies in the US that offer annuity packages do have hidden fees which you may never know at the initial states. You have to take your time to make proper inquiries before you agree to sign any contract deal. If you’re confused, always make sure you consult a reliable financial adviser.