People have a lot of options when it comes to selecting the right investments for their portfolios. These investments include stocks, bonds, real estate, and cryptocurrencies. Each investment type has its own benefits and risks. For this reason, some investors turn to annuities as a safe alternative to protect them from changes in the market.

Annuities are special investments issued by insurance companies that are designed to provide a stable, consistent payment to the investor. The person buying the annuity (referred to as the annuitant or owner) pays either a lump sum or a series of payments to the annuity provider, who in turn disburses predetermined, regular payments back to the annuitant over a specified period, which could span a lifetime or a fixed number of years.

In most cases, the insurance company guarantees a certain payment regardless of the condition of the market. So annuities are commonly used for retirement planning as a means to provide a steady source of income during retirement. They can also serve as part of estate planning strategies or as long-term savings and investment instruments, particularly when investors seek protection against longevity risk – the risk of outliving one's savings. Furthermore, some annuity products come with features like death benefits or guarantees to return the principal within a specific time frame. This is useful for retired people since the payments will continue for the policyholder’s life.