Insurance contracts that invest in international securities have been the top performers of 1993, riding on the coattails of mutual funds that invest abroad. according to Lipper Analytical Services.

Variable annuity and variable life insurance products that invest in international mutual funds dominated Lipper's year-to-date lists of the top 20 performers.

Variable annuities are insurance contracts that invest in an underlying pool of securities to generate a steady stream of income, typically for retirement. Earnings aren't taxed until they are tapped. Yields on variable annuities fluctuate day to day, depending on the performance of the investments.

Death Benefit Included

Variable life insurance products, which also invest in mutual funds, are similar to variable annuities, except that they include a death benefit, which not all annuities do.

Thirteen of the products that made the Top 20 Performing Variable Annuity list have holdings in international mutual funds. Returns on these accounts ranged from 28.29% to 35.98%, according to the Lipper Variable Insurance Products Performance Analysis Service, which tracks insurance products for the Summit, N.J.-based company.

The best-performing variable annuity, for the period from Jan. 1 to Sept. 30, was the Mutual Benefit 11: Dreyfus Small Capitalization Account which posted a 48.56% return. It also took the top spot in the one-year category, with a 94.33% return rate.

Other members of the top 20 team in the variable annuity group put money in the global, small-company-growth, and natural resources investment-objectives categories, the study found.

Manufacturer's Life 2: Emerging Growth Equity had the best performance for the five-year period ended Sept. 30, with a total cumulative return of 200.32%.

In variable life insurance, Metropolitan Life Universal Life International account claimed the No. 1 spot, with a 36.34% return.

Equity accounts fared best in the one-month, nine-month, one-year, and five-year periods tracked by Lipper, taking the top 20 spots every time except one. For the five-year period, the Provident Mutual 2006 Variable Universal Life Target Maturity Account, a fixed-income account, returned 120.48%.

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