What is a Variable Annuity? Variable Annuities give you the power of tax-deferred compounding and you don’t pay taxes on your earnings until you make a withdrawal. That means you end up earning a return three ways.Your principal earns a return. Your interest earns a return. Additionally, all of the money that you would have paid to the IRS stays in your account to earn a return for you as well. This tax-deferred compounding is what makes annuities such an attractive way to grow your hard earned dollars... for and during retirement.In addition, You have the added investment flexibility to invest in your choice of investment sub-accounts. Tax-deferral and the advantages of sub-account investing make Variable Annuities very smart way to invest.Variable Annuities allow you to invest your money in your choice of sub-accounts ranging from those that invest in money markets to growth stocks to US government bonds and much more.It’s important to remember, in a Variable Annuity, unlike a fixed annuity, your principal and earnings are not guaranteed and will fluctuate with the investment performance of the underlying investments. Offsetting the risk however, is the potential of higher returns over what you might expect to earn in a fixed rate investment.Variable annuities are sold by prospectus only. Contact us for a prospectus which contains complete information, including any charges and expenses. Read it carefully before investing. Key Benefits 100% Tax-deferred compound earnings during accumulation periodTax Free switching between investment choices"Separate Account" protection from insurance company creditorsNo Front-end loads, fees or sales charges This is not an offer to sell a specific product, which may only be done after proper delivery of a prospectus. Read it carefully before investing. For Long-term Investors Variable annuities are designed to help investors save for retirement and need to be viewed as a long-term investment vehicle. For example, investors must pay a surrender fee if they get out during the first several years. The charge often starts at 6% and declines each year. And investors must pay a 10% penalty to the IRS if they withdraw any money before age 59 1/2. Are Variable Annuities Right for You? Before you consider a variable annuity, ask yourself one question: Are you already making the maximum contribution to an IRA, 401(k), or other tax-qualified retirement account? Before purchasing a variable annuity, you should "max out" on your 401(k) because your contribution is invested with pretax dollars.Annuities do offer a number of attractive features compared to other retirement options. For example, the maximum individual contribution to an IRA each year is $2,000 ($4,000 for spousal IRAs), and 1998’s contribution limits to a 401(k) plan is $ 10,000. By comparison, a variable annuity has virtually no upper limit as to how much you can contribute. What’s more, IRA holders must begin tapping into their retirement nest egg by age 70 1/2.