Top 5 Annuity Benefits
Benefit #1: You pay less in income taxes. With money in taxable alternatives, you pay income taxes on all earnings whether you leave them in or take the earnings out. With an annuity, you pay income taxes on your schedule, typically when you want to take money out.
Benefit #2: You can have more money with an annuity than with a taxable alternative. This is because earnings accumulate three ways inside an annuity. Earnings compound on principal, earning compound on earnings and earning compound on money you would otherwise pay in taxes.
Benefit #3: You have three ways to withdraw money. You can take 10% of the value out each year. You can surrender your annuity, from which there may be a surrender charge. The third is called annuitization. When you want monthly income, for whatever time period you desire, you annuitize the policy.
Benefit #4: You enjoy the tax advantages set up by the government for non-qualified annuities. You could say that the annuity picks up where your IRA left off. It is just like an IRA. Earnings accumulate without tax consequences and income taxes are paid when you choose to withdraw money. However, unlike your IRA, there is no limit to how much non-qualified dollars you can put into annuity.
Benefit #5: You choose how your earnings grow. You can receive an interest rate guarantee for one or more years or your earnings can be tied to an index like the S&P 500. The question is; When would your like to reduce paying income taxes on your earnings?

Equity Indexed Annuities- Short Term Surrenders.
When shopping for an EIA consider a short term product. Shorter terms allow for the freedom to re-evaluate financial situations sooner. Some insurance companies are now offering contracts with durations as short as three years.
We all want to opportunity to benefit from market growth, with no downturn risk on a tax-deferred basis. I also like the idea of being able to change my mind, as far as products, in the shortest amount of time possible.
Short term EIAs are an excellent choice not only because of the growth with no loss, but the fact that they guaranty and income stream that cannot be outlived. EIAs have a better chance of keeping up with inflation that CDs and traditional fixed annuities. If you need to play catch up and offset previous losses, this is a very viable option.
Many of the new generation EIAs are very straight forward and not at all difficult to understand. The easier they are to understand the more apt we are to buy, and the insurance industry knows this.
Most of our financial goals involve accumulation, which makes the tax-deferred growth of an EIA a very attractive benefit. On the other hand we are also looking for flexibility. Being wary of market ups and downs is natural. EIAs protect us from losses that other products cannot deliver. You will lose money in financial products that have a potential for loss.
Shorter contract durations give us the power to decide if our financial choices today are still the right choice tomorrow and for years to come.