What Is The Difference Between A Variable Annuity And Variable Life Insurance? 
A variable annuity is a tax-deferred retirement vehicle that allows the owner to choose from an offered selection of investments . When annuitized , it pays out a stream of income to the annuitant . The investments you choose for your variable annuity can increase or decrease in value and that means the overall value and your payout will follow . While a variable annuity can offer a nice upside , there is risk and if the investments inside the annuity decline in value , your payout will be decreased . A variable life insurance policy is a form of permanent life insurance offering a death benefit to your beneficiaries upon your passing . A portion of the premium you pay for a variable life insurance policy goes toward the insurance , a portion toward various investments that the owner of the policy chooses and a portion goes to cover associated fees related to the management of the investments . The variable life insurance policy owner will be given options for the investments , generally mutual funds . As the value of those mutual funds go up and down , the cash value inside your policy follows . There are many options to variable annuities and variable life insurance products that should be considered before purchasing . 