When Are Annuities Good? 
An annuity has a distinct advantage over other investments . That advantage is its ability to provide a lifetime income guaranteed . If that is the need , then an annuity is the only option . The second advantage is the income tax treatment given to an annuity . During the accumulation phase any gain on the policy regardless of its source is deferred until the annuity is surrendered or annuitized . Annuities can incorporate a wide range of investments which will allow an investor to change investment strategies with the passage of time . The biggest disadvantage to an annuity is that it is a long term program and capital is difficult to withdraw if needed in the early years of the contract . 