Benefits of an Annuity Purchase

There are various reasons to buy an annuity. Safely creating wealth for your heirs, wanting guaranteed principal and interest and avoiding probate upon your death or needing an increased retirement income are common reasons.

There are very few investments that provide such benefits. An annuity's three primary advantages are tax deferral, avoidance of probate and a guaranteed income for a fixed time period or life.

An annuity is beneficial for an individual investor because it requires the issuing insurance company to provide a guaranteed periodic payment to the annuitant once the annuitant reaches retirement and requests payments.

Annuities can also help you manage your investment portfolio. If you are in the stage of your life where you need income, an immediate annuity can help protect you from outliving your assets. In certain circumstances, annuities can also help protect your assets from creditors. Typically, creditors can only attach the payments from an immediate annuity as they're made, since the money you deposited with the insurance company to purchase the annuity now belongs to the company and is not accessible by you. Some state statutes and court decisions also protect some or all of the payments from those annuities.

An annuity can help you meet your retirement income goals, and can also help you diversify your investment portfolio.