I clipped this from TheStreet.com.

I believe there is a place for variable annuities. They could be considered for part of a portfolio under the following circumstances:

When targeted for retirement years (after age 59 1/2), but held for at least 10 years by an investor who expects to be in the same or lower income tax bracket at retirement.

When investors have maxed out contributions to 401(k)s, IRAs, 403(b)s and the like.

When investors plan to take the money out over a few years, not in a lump sum.

When somebody can benefit from the variable annuity's guaranteed death benefit.

Note that there are only a few situations where they make sense.