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An annuity is an insurance policy that in many aspects, functions like an investment product. In a typical annuity policy, the investor pays a premium to the insurance company providing the annuity. This payment can be made in one lump sum, or in a series of payments over a 10 - 25 year period. At some point, the investor can choose to begin receiving monthly income back from the annuity. This monthly income can continue either for a specified time or for life depending on the details of the annuity contract.

Instead of monthly payments you can also purchase annuities by making a one-time payment. Many of the people who choose this option are workers retiring with a 401k account. They can better use their 401k funds by investing it in an annuity after they retire. The money received from the 401k continues to be tax-deferred if invested in annuities and thus provides additional benefits.

An annuity is not the exclusive domain of the rich, as many may believe. Annuities can be used by anyone who is currently saving for retirement. Discretionary income of any amount not used to pay bills that would otherwise have been deposited into a savings account could just as easily be put toward an annuity policy.

It is very important to search for the best annuity quotes when shopping for annuities. When searching for an insurance policy for your car you would select a policy with the lowest rate and the best coverage. In a similar fashion, search for insurance companies or brokers providing the best annuity quote.

To become well informed on the subject of annuities, you could visit multiple annuity providers and receive annuity quotes from each one. Because of the variety of annuities available in the marketplace, you'd be presented with a wide range of choices. For example, there are differences in the length of pay-in and pay-out that can directly impact whether a particular annuity is optimum for your individual needs. Thus, searching for the right annuity can be a very time-consuming and confusing experience due to the sheer number of options out there.

Fortunately, it's easier to find the best annuity than many people imagine. Potential investors can request annuity quotes from multiple providers all at once. The Internet makes it easy to visit annuity websites and obtain all the information needed to make a good decision. With so much information available on the possible choices, a smart investor can find just the right annuity for their individual needs.