What to know about a straight life annuity comes down to understanding that this versatile investment product can help to ensure a steady stream of income under many different scenarios and circumstances. For purposes of discussion, and annuity of any type is a financial product sold by a licensed agent who usually works under the auspices of an insurance company, though he or she is many times an independent agent.

In effect, an agent selling a straight life annuity will be doing so in hopes of earning a commission. However, because these annuities are financial and investment products they are regulated in accordance with the law, which can help to prevent those who are considering investing in them from being taken advantage of by unscrupulous agents.

This isn't to say that any agent out there trying to sell a straight life annuity – or any sort of annuity, for that matter – will be unscrupulous in any way, because most agents certainly aren't. If they were, they wouldn't be in business for very long and they could possibly find themselves in trouble with various government regulatory agencies. A straight life annuity can make a lot of sense for people looking for an attractive investment, in many cases, by the way.

Basically, an annuity is a way To set up a stream of payments made after the annuity has been purchased and which will occur at predetermined time periods and for predetermined lengths of time. There are several different kinds of annuities, and each has its benefits and drawbacks. It's always a good idea to research annuities prior to entering into any discussions with an agent about them.

A straight life annuity comes in a couple of different variations, including fixed and variable annuities. Variable annuities are attractive in many ways because they offer tax deferral, which is something that fixed annuities don't, although a fixed annuity offers a guaranteed payouts whereas a variable annuity and its payout will depend upon the performance of the funds that underlie it. These are usually stocks, which can be volatile in many circumstances.

A fixed straight life annuity, on the other hand, is usually based on government bonds, all of which will guarantee a rate of return. Many fixed annuities require higher levels of funding in order to return similar payouts close to what variable annuities do, but variable instruments are subject to market ups and downs that fixed instruments aren't. In other words, one's tolerance for risk should determine what sort of annuity instrument one chooses to purchase.

Head to the Internet and enter in a few suitable phrases into any search engine. The results returned will most likely be from websites that are aimed at educating people on various annuities, but take care that the website isn't self-serving or from an insurance company aiming to push its own life insurance or annuity product. One should be aware that most annuities are sold by life insurance companies. Once one understands all of this, it's a fair bet that there won't be any issues with the purchase of an annuity down the road.