Although long part of well-diversified financial portfolios, annuities have continued to evolve. Recent developments have included features such as adding checkbook access to variable annuity funds, more attractive "bonus" rates, shorter maturity periods, and guaranteed death benefits.

Moreover, clients now have wider choices of annuity types, plus more investment options, and guarantees to fit their investment and income goals. For example, some annuities offer guaranteed bonus interest rates for the first few years, or guaranteed returns for the life of the contract. Other annuities guarantee beneficiaries the return of principal if the annuitant dies and the annuity stock market investments have lost value.

Although annuities have evolved, their primary objective remains the same, which is being able to lock in a guaranteed payout that cannot be outlived. As people live longer, healthier lives – and the equities markets remain subject to unsettling fluctuations – financial products offering safety, flexibility and guaranteed returns are increasingly appealing to older consumers. However, investors of all ages are drawn to variable annuities whose return is tied to the stock market, but which also offer guaranteed minimum returns not tied to market performance.

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