Annuity helps in retirement income, provides a lump sum for dependants on death and helps in tax deferral too. There are 3 variants of annuities which , provide different benefits for different retirement income needs

• Fixed - provides a guaranteed principal and guaranteed rates of return, plus tax deferral
• Variable - potential for greater income based on market performance. They are subject to market risk and are tax deferred
• Immediate - provide a specific amount of income for the rest of your life or for a specified length of time.

Thus being a long-term insurance product annuity provides people a combination of protection through death benefit(s), tax deferral and income in retirement. Also, an annuity can provide with either lifetime income or a lump sum income, depending on the type and preference of annuity.