22 uses for annuities in 2022


13. Gifting to family members

Use an income annuity to create cash flow for gifts to family members using the gift exclusion with the funds used for education funding, lifelong gift or vehicle leasing, or purchase payments.

14. Diversification tool

Take advantage of the various indexing options available on a fixed indexed annuity or investment options on a variable annuity to create a diversified approach to meet consumers’ accumulation goals.

15. Minimize the risk of returns

Take advantage of the main protection of fixed deferred pensions to protect yourself against the risk of major market slumps in the early retirement years.

16. Create a Lifelong Income Stream

Exchange the present value of a permanent life insurance that is no longer required for a tax-free exchange for an annuity product.

17. Accelerate Income Creation

Take advantage of tax deferral on annuities in three ways to earn interest: interest on capital, interest on interest, and interest on tax savings.

18. Supplement to retirement income

Take advantage of retirement insurance and optional income controls on annuity products to create a protected stream of additional retirement income.

19. Discount and discount benefits

Take advantage of the intrinsic characteristics of deferred annuities to have the proceeds of an annuity paid directly to named beneficiaries and likely avoid the time and expense of inheritance.

20. Zero is your hero

Use the fixed indexed annuity structure to ensure that the principal paid on the contract is not lost due to market declines. The buyer of a fixed indexed annuity does not receive less than zero percent interest in any credit period.

21. Income Planning for Small Businesses

Use a deferred pension income options to create a lifelong stream of income for small, qualified plans by making retirement a qualifying plan investment.

22. Receive subsistence benefits

Use the contractual services and optional passengers of deferred pension products to receive vital benefits, such as waiving the repurchase fee for home accommodation, waiving the repurchase fee in the event of incurable illness or increased income in the case of chronic illnesses. The livelihood benefits available depend on the actuarial life insurer’s package of benefits.

The above ideas only scratch the surface of how the tax-privileged structure, income options, product warranties, and optional product life benefits of annuity products can be used as a tool to help consumers cope with their financial challenges.

As our society ages, annuities are one of the few financial products that offers the features and benefits necessary to provide guaranteed protected income options to meet the cost of extending life expectancy.


Harry N. Stout was President of Fidelity & Guaranty Life, Deputy CEO of Old Mutual Financial Network, and General Manager of Insurance Insight Group. He is the host of the FinancialVerse podcast and author of FinancialVerse’s personal finance books and from Today’s pensions – a tool for creating a protected lifelong income.

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