Market investing inside an insurance wrapper — with optional guarantees, and the highest fee stack of any annuity.
Your premium goes into investment 'subaccounts' (mutual-fund-like portfolios), so the value rises and falls with the market. Optional living-benefit riders can guarantee an income or withdrawal floor — for an added annual cost.
Fees stack and compound, quietly eroding returns; converting future gains into ordinary income can cost you versus a taxable account; and the riders are often over-sold to people who don't need them. Complexity is the product's best friend and your worst.
Market-linked and uncapped — real growth potential, but real downside. Net returns are dragged by the layered fees.
The heaviest in the category. Mortality & expense (M&E) charges, subaccount fund fees, administrative fees, and rider fees commonly stack to ~2–4%/year in total.
Surrender charges typically apply for the first ~6–8 years; after that, subaccount value is accessible (subject to taxes and any rider consequences).
Tax-deferred growth; withdrawals of gains taxed as ordinary income (not capital-gains rates) plus a possible 10% penalty before 59½ — a notable drawback versus holding the same funds in a taxable account.
Educational explainer, not individualized financial advice. Figures are typical industry ranges as of 2026 and vary by insurer, product, and state. Sources: SEC/FINRA investor bulletins, IRS Pub 575/939, NAIC model regulations, SECURE 2.0 Act. We’re independent and don’t sell annuities.