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Annuities > Sub-accounts

The stock market is no longer seeing the double digit returns of the 90's and many investors are worried about the downward momentum. All of this is emphasized with scandals at large corporations like Enron and WorldCom, reducing investor confidence. What does this mean for your variable annuity? Most experts say "nothing."

Variable annuities are meant to be treated as long-term investments, and investors shouldn't be trying to change them around with market shifts. While it's hard to ignore major drops as we've seen of late, many analysts now say you should expect normal historical rates of growth, about 8 to 10 percent per year.

However, if you need to access your funds soon, or you are not comfortable with the current state of the financial markets, you have the option to move your money into lower risk sub-accounts, moving it around from lower to higher risk accounts when you feel more comfortable.

Fees for switching between sub-accounts vary between companies, though some contracts may include a number of free transfers or even waive them all if you have a certain minimum balance in your investment.