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A fixed annuity is an accumulation planning vehicle that allows an individual to accumulate money they’re not going to need for at least 5-7 years. One of the benefits of this type of vehicle is that it offers a return significantly larger than usually offered in a bank CD or money market fund.  In addition it allows the money to accumulate on a tax deferred basis. In addition It is GUARANTEED by the Life Insurance company that issues the contract.  Even in this day and age  of Bailouts and failed financial institutions that GUARANTEE is extremely meaningful as not one investor has ever lost a nickel in a failed Life Insurance contract.

In today’s volatile investment climate, which you may have noticed, an Immediate annuity may be an excellent investment vehicle for the individual who wants to assume absolutely no market risk yet be provided with a guaranteed income for the rest of their lives. With the assurance that it will be significantly higher than what could be earned in a CD. I suppose a favorable tax treatment wouldn’t hurt either right?