American Funds Insurance Series®
Variable annuities are among the fastest growing retirement investments. Despite their popularity, many people still don’t know much about them.
An annuity is a contract issued by an insurance company that can include an option to turn your assets into an income you can’t outlive.*
Annuities can be good for retirement because taxes aren't due on variable annuity earnings until they are withdrawn. Since variable annuities are designed to be retirement investments, because of this tax-deferral feature, there is typically a 10% federal tax penalty on earnings withdrawn before age 59½.
When you buy a variable annuity contract, your money is invested in funds — similar to mutual funds — that are managed by investment professionals. Returns on your investment fluctuate as the prices of the stocks and bonds in the funds rise and fall. That’s why the annuity is called “variable.”
AFIS funds are available in variable insurance products offered by:
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Futures contracts may not provide an effective hedge of the underlying securities because changes in the prices of futures contracts may not track those of the securities they are intended to hedge. In addition, the managed risk strategy may not effectively protect the fund from market declines and will limit the fund's participation in market gains. The use of the managed risk strategy could cause the fund's return to lag that of the underlying fund in certain rising market conditions.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses , which can be obtained from a financial professional and should be read carefully before investing.
The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. Bond ratings, which typically range from AAA/Aaa (highest) to D (lowest), are assigned by credit rating agencies such as Standard & Poor's, Moody's and/or Fitch, as an indication of an issuer's creditworthiness.
Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. Small-company stocks entail additional risks, and they can fluctuate in price more than larger company stocks.
Past results are not predictive of results in future periods.