A variable annuity policy allows the owner to invest the policy values
in a selection of separate accounts similar to mutual funds. Separate accounts
could include money market funds and mutual funds invested in stocks and
bonds. Both immediate and deferred annuities can be variable annuities.
A variable annuity presents a higher risk to the owner because the cash
value, current income payments, and deferred benefits could vary based on
the investment performance of the separate account. The value and benefits
of a variable policy are directly related to the investment funds and are
not protected by the Idaho Life and Health Insurance Guaranty Association.