An annuity is a financial product offered by an insurance company that converts savings into a guaranteed stream of lifetime income. It acts as a risk mitigation tool by protecting the principal investment while also offering secure opportunities for growth. Annuities can be further customized with optional riders providing financial safeguards against long-term care needs or critical illnesses.

The most popular types of annuities include:

1. Fixed Annuities: Offer a stated interest rate for a specific period of time. This rate is locked in at the time of purchase and remains fixed throughout that period. 
2. Indexed Annuities: Links the returns to a market index, like the S&P 500. This allows participation in the market's growth when it performs well, while also protecting from losses if the market takes a downturn.

 Why should you choose an annuity?

1. Protection Against Market Fluctuations: Annuities, particularly fixed or indexed types, are renowned for their stability. Unlike direct stock market investments, which can be unpredictable and risky, fixed and indexed annuities offer a shield against such volatility. This is particularly appealing for retirees or those nearing retirement who prioritize the preservation of their capital over high-risk investments.
2. Consistent & Reliable Growth: One of the hallmark features of annuities is their ability to provide a stable growth rate. This is especially beneficial for individuals seeking a predictable financial future as they approach retirement. Fixed annuities offer a set rate of return, while indexed annuities provide growth potential linked to market indices but with built-in protections against market downturns.
3. Guaranteed Income for Life: Annuities are particularly valued for their capacity to deliver a lifetime income. This addresses a significant concern in retirement planning – the risk of outliving one's savings. An annuity converts a part of your retirement fund into a steady income, offering financial security throughout your lifetime.
4. Tax Advantages: The growth of funds within an annuity is tax-deferred. This means that your investment grows without being taxed until you start making withdrawals. This tax-deferred growth can lead to potentially higher returns over time compared to taxable accounts, making annuities an efficient tool for long-term financial planning.
5. Customizable Options for Diverse Needs: Annuities are not one-size-fits-all. They come in various forms, each designed to meet specific financial goals and needs. Whether you’re looking for immediate income, planning for long-term retirement, or seeking an option with benefits for your heirs, there’s an annuity structured to meet these needs.
6. Estate Planning Benefits: Some annuities come with features that facilitate estate planning. For example, certain annuities allow for the transfer of remaining funds to beneficiaries after the annuitant's death, making them a strategic tool for legacy planning.