Annuities can be purchased through insurance agents, financial planners, banks and life insurance carriers. However, only life insurance companies issue policies.

Agents

Agents are insurance professionals who are licensed by your state insurance department. Some agents work exclusively for one insurance company, while others represent several.

Unlike a 401(k) or an IRA, there are no limits on the amount that you can invest in an annuity.

Whether you’re considering a deferred or immediate annuity, the amount of money you should consider putting into an annuity depends on:

Annuities can serve many useful purposes.

Both annuities and life insurance should be considered in your long-term financial plan. While both include death benefits, you buy life insurance in the event you die too soon and an annuity in case you live too long. In other words, life insurance provides economic protection to your loved ones if you die before your financial obligations to them are met, while annuities guard against outliving your assets.

There are two main types of annuities—deferred and immediate—and two main types of life insurance—term and whole life. The chart below compares them.