There are many important reasons to invest in an annuity, especially when you consider the limitations of other types of investments. For example, annuities can provide for…

Guaranteed income An annuity can provide you with a guaranteed lifetime income, regardless of how long you live. No other investment instrument can provide this guarantee.

Unlimited contributions, Unlike other tax-advantaged investments, such as IRAs, you can contribute an unlimited amount of money to an annuity during the year, whether in periodic installments or a lump sum. Individual carriers may place a ceiling on the total amount you may put into an annuity without approval.

Bonus rates. Some annuities award investors with bonuses — extra interest that further increases your investment — at the end of your annuity’s first year . The bonus increases the annuity’s principal on which future interest will be calculated in subsequent years, thus providing a substantial boost to the ultimate value of an annuity fund.

No risk of loss (if you select a “fixed” annuity), unlike other forms of stock or fund investments. Annuities that are invested in mutual funds or are tied to the stock market performance may include minimum guarantees to limit the amount of investment risk.

No-penalty rollovers. Company pension or profit-sharing plan payouts may be reinvested without incurring current taxes or penalties.

No probate in case of death, as long as beneficiaries are specified by you. Which means your family will find it easier and less costly to obtain the value of the annuity.

No initial sales charges (“no load”) or annual fees, Annuities are generally no-load, no-fee investments, which means more of your money is actually invested than with investments where some money is used to pay an initial or annual charge.

Shelter investment earnings. Retired people can use annuities to shelter investment earnings that would otherwise lead to taxation of Social Security benefits.