When Do Variable Annuities Make Sense? 
A tax deferred variable annuity , like all insurance or investment products , needs to be suitable to the buyers financial profile , which includes risk tolerance assessment , financial goals and a life expectancy report . A tax deferred variable annuity is a security investment and an insurance product . It has a general interest rate account and separate sub accounts using equities and bond instruments . Tax deferred variable annuity separate subaccounts can lose money . Three items to consider that may make sense for a tax deferred variable annuity purchase : If youre in a high tax bracket , the tax deferral feature could , over time , be of significant value in your investment posture is market driven . 