Though an annuity is often used interchangeably with an investment product, it is actually and insurance policy. But the operation of an annuity policy is similar to an investment product. Normally, the investor pays either a single premium or monthly premiums to the insurance company for an annuity product. The time period for such premiums can last for as long as 10-25 years. When the investor is ready, he/she receives monthly income payments from the insurance company from the annuity. Depending on the terms of the annuity contract, the payment from the insurance company may last for a specified period of time or for life.

Instead of monthly payments you can also purchase annuities by making a one-time payment. Many of the people who choose this option are workers retiring with a 401k account. They can better use their 401k funds by investing it in an annuity after they retire. The money received from the 401k continues to be tax-deferred if invested in annuities and thus provides additional benefits.

Many people mistakenly believe that annuities are only an investment option if you're wealthy. However, anyone who has decided to start saving for retirement can easily decide to start investing in an annuity as well. Any amount of money that you normally don't use, also known as "discretionary income", can be invested towards an annuity product.

When purchasing an annuity, finding the best annuity quotes is an important factor. Comparing multiple insurance companies or brokers that provide annuities is recommended. Consider shopping around for your annuity, similar to looking for the lowest rates and best coverage when purchasing a car insurance policy.

Different providers will give different annuity quotes for the same investor. The best way to choose the right annuity is to see many different quotes, giving an overall picture of the current annuity market. But it can be confusing to sort through different providers' quotes; many options are available for customization. These options include the length of time the investor makes payments on the annuity, the length of time the investor will receive stipends from the annuity, and the value of both the payment and the stipend.

The good news is that, its not as difficult to find the best annuity as you might think. There are options available wherein you can research and obtain various annuity quotes from a variety of providers right in one place. Investors can now log onto many available annuity sites on the internet and research any amount of data they would ever want, related to any annuity. With so many tools around to help you find the right annuity, it would be quite unfortunate not to research annuities as you would any other investment.