Variable annuities are more complicated than fixed annuities and usually have more features and higher fees than fixed annuities. Although, typically, no commissions are paid by the owner when the variable annuity is purchased, variable contracts are subject to a number of fees and charges, including:
- Investment Management: These are paid to the manager of the investment sub accounts;
- Administrative & Mortality Risk Charges: These cover the issuer's expenses, and the cost of the guaranteed death benefit provision;
- Surrender Charges: These are fees imposed if withdrawals in excess of a certain amount are made, or if the contract is surrendered completely. Surrender charges can range from 0 to 10 percent, and typically decline over time.
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