They re offered through banks, brokers, and other financial institutions. In this agreement, the customer agrees to pay the life insurance company a specified amount of money. These payments are also known as purchase payments and can be made once or over a series of payments. In exchange for these purchase payments, the investor can opt to receive a lump sum or a series of payments from the insurance company. Depending on the type of annuity you purchase, there may be no government limits on the amount you can contribute.
Annuities come basically in two forms fixed or variable.
A fixed annuity offers a fixed rate of return. This type of annuity is good for investors who want the security of a guaranteed rate of return. With a variable annuity, you can invest in investments from some of the nation s leading money managers. You choose how your money is invested how much and in which investment options. Variable annuities give you many investment options, from stock market investments to fixed investments, so you have the opportunity to beat inflation and really grow your nest egg.