Buying insurance is a part of the investment plan and it is very essential to invest financial assets in a proper way.
An annuity is an investment option sold by many insurance companies. It is a contract between the insurance company and the investor where the company promises to do something good with investor's money.

The company either helps to grow the money or the money is paid back after a certain time period.
The payout of an annuity can be immediate or deferred and the returns can be fixed or variable. An immediate payout starts the payment to the investor immediately after it is purchased and in deferred payout, investor receives payment at a later date. A fixed annuity provides guaranteed returns by investing money in securities like government bonds. A variable return annuity offers variable returns according to the where the money is invested such as stocks, bonds, etc.

Here are some of the attractive features of annuities-

• Tax deferred: It is an important feature of annuities that give it an advantage over other investment options. During the accumulation stage, tax is not applicable on the interest received on annuity which will help in its growth. When the investor starts receiving payments, he is expected to pay taxes.
• Guaranteed rate of returns: With fixed annuity, investor can receive a fixed amount of money. Even with equity-indexed annuities, investors receive a minimum rate of return.
• Flexible: An investor can choose to receive monthly, quarterly or annual payments. He can also pay the premium in lump sum or in installments. Also annuitant can choose if he wants to receive payment for a specific time period or for lifetime.
• Protection: Annuities are considered as protected assets and cannot be seized by the courts. Many other investment options do not have this feature.
• Safety: Annuities can be issued by companies regulated by state and federal laws, which makes it a safe investment option.
• Benefits to the heirs: With guaranteed period immediate annuity, after the death of the investor, the company will continue to pay the beneficiaries, till the end of the stated period. The annuity benefits are passed to the beneficiaries.

These features make annuities a profitable investment and popular options amongst the investors. With investments such as annuities, a person can safeguard his future from unexpected risks.