When Does A Variable Annuity Make Sense? 
The variable annuity will make sense based on your individual needs and personal circumstances . This type of annuity is a contract between the insurance company and the insured -LRB- i.e. client or customer -RRB- . The insured pays one lump sum payment or may make other payment arrangements to the insurance company . Then , the insurance company agrees to make payments back to the insured at specific dates in the future . With the variable annuity , the client can receive monthly payments for the rest of his life . Also , this annuity protects you if you out live your assets . Variable annuities are also used to hedge against inflation . If you think you are going to live a long time , you should think about buying an annuity . Your beneficiary -LRB- i.e. children and other family members -RRB- may be able to receive the payments when you die . The variable annuity is tax-deferred . You do not pay taxes until you withdraw the money . Some variable annuities have a death benefit . Make sure you read the prospectus and ask a lot of questions . This type of investment is for the long-term and to help you meet your retirement goals and objectives . 