A guaranteed financial contract issued only by life insurance companies that allows you to pay a lump sum to accumulate money tax-deferred over time, and the issuing company guarantees payment to the buyer in the future, usually at retirement. You will not pay income taxes on the money until those payments are made to you, this is a great benefit called "tax deferral." This guaranteed benefit does NOT apply to Variable Annuities that can lose your money in the stock market.