VARIABLE ANNUITIES: Insurance Companies Are Pro & Con

THE insurance industry is embroiled this week in a first-class row over the variable annuity, the newest gadget in financial security. The word that caused the trouble is "variable," which means that the premiums are invested in common stocks and that payments vary according to the rise or fall in stock values and dividends, instead of being paid in fixed amounts. The big advantage of the variable annuity is that in periods of inflation, when the purchasing power of the dollar depreciates, stock prices and dividends more than make up the difference by their rise.

While the insurance industry argued, the...

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