Annuities are contracts that are offered by insurance companies to the general public. Investors are assured a pre-determined rate of return on their investment. It is possible to buy an annuity with a premium or several premium payments. Annuities are ideally used to create a retirement plan that ensures that the investors have a regular source of income after retirement. Whilst annuities have been around for a very long time they came into prominence in the USA during the Great Depression when they offered hope of financial stability to millions. The annuity is perhaps one of the few financial tools that has such a long and rich history and yet has been reinvented and modified in order to satisfy the changing financial needs of people. As there are many different types of annuities, investors have the choice to select an annuity that offers them the conditions they desire. Some of the annuities available include the fixed rate annuity, immediate annuity, deferred annuity and the equity-indexed annuity.

Annuities are special in many ways and in comparison to other traditional investment tools they offer versatility and flexibility to the investors. Investors prefer annuities to traditional investment tools such as CDs as they offer a better rate of interest than conventional investments and due to the fact that they are tax deferred they allow the investment to compound.

Advantages of Annuities vs. Traditional Investment Tools:

Annuities are ideal for all types of investors, small and big. Whether you are a conservative investor or someone who also wants to benefit from the good performance of a stock market index, annuities can help you invest your savings accordingly and create a secure future for your retirement.