Only about 3% of insurance policies sold are immediate or income annuities. Policyholders often can’t get access to cash once they sign the annuity contract. Plus, if they die before their principal is exhausted, any money left, unless they make other arrangements, generally goes to the insurance company. Even if the immediate annuity permits limited withdrawals and/or lets beneficiaries collect the proceeds for a specific period when the policyholder dies, lower payouts result. Finance Professor Lee Lockwood found that those with children generally don’t invest in immediate annuities for this reason. In addition, today’s low interest rates make annuities less attractive. “People with plausible bequest motives are likely to be better off not annuitizing any wealth at available rates,” Lockwood noted after his study showed that putting about 20 to 25 percent of retirement income portfolio into an immediate annuity can dramatically reduce a client’s risk of running out of money according to a recent report at www.wealthmanagement.com.