Annuities come with many advantages that lure people to invest their money. But before purchasing annuity, you should think if you really need annuity. People buy annuities to save money on taxes and for a better future. Annuities are high risk investments and there are many reasons why people buy annuities.

• Tax treatment: Earnings from annuities are tax deferred i.e. taxes are not paid until withdrawals begin. This feature makes them very popular among people.
• For Immediate Payments: People who have money can purchase immediate payment annuity that starts paying out immediately. If someone is of retirement age, they purchase annuity and receive monthly, quarterly or annual payments.
• For Retirement income: Retirees rely on pension as income after they retire and many people don't want financial burdens when they retire. They can invest in a deferred annuity which starts payout at retirement age and can be for specific years or lifetime.
• Diversify investment portfolio: Annuities can be fixed or variable and helps investors create a diversified investment portfolio. Investing in fixed annuities offers a guaranteed return.
• Protect assets from creditors: Creditors can access the payments from an immediate annuity as they’re made. Some state statutes and court judgments protect all or a part of the payments from these annuities.

Annuities are a safe way to take care of the hard earned money but one also needs to be very careful before choosing the scheme. In the long run, annuities can prove to be very beneficial. They have many advantages which makes them attractive to investors. But annuities should be purchased after careful consideration.