A variable annuity is a type of investment product offered by insurance companies that allows individuals to save for retirement. It combines features of both insurance and investment, enabling policyholders to invest their premiums in various investment options, such as stocks and bonds. The value of the annuity can fluctuate based on the performance of these investments, hence the term "variable." When the policyholder decides to withdraw funds or receive payments, the amount can vary depending on the investment performance. Variable annuities often come with additional features, such as death benefits and income guarantees, which can provide financial security for the policyholder and their beneficiaries.