Not only is the product the insurance industry's answer to retirement blues, but it addresses their own woes about how to woo back investor dollars. In the 1920s and 1930s, insurance companies were considered a safer place to put your money than a bank. The industry benefited from an influx of cash. But with the advent of the passbook savings account in the 1940s and it's popularity in the 1950s and 1960s, cash flowed out of the industry and back into banks.

In the decades that followed-particularly the 1990s-investors were more focused on accumulating wealth than preserving it. The cash flowed out of passbook savings accounts and into mutual funds and the stock market. Insurance companies were forced to partner with mutual fund companies to survive. But the stock market downturn has investors once again looking for income preservation, and insurance companies want to capitalize on that fear. The fixed immediate annuity is the main weapon in their arsenal.

"We were struggling in the '80s and '90s. We were not the most efficient accumulation vehicles," says Bill Campagna, a vice president at MetLife Financial Services in New York. "But insurance companies are the only ones who can do this type of payout, based on mortality. It's like a private pension, and that has a lot of appeal to people now, when they're seeing their assets going down and their life expectancy going up. It's got a lot of people spooked."

The product suits the insurance industry because it pools risk, something they have been doing for years. While some investors will require that the insurance company pay him $5,000 a year for 20 years, others will opt for the life-only payment stream and die well before they were expected. The insurance company prices its product based on the fact that most 60-year-olds buying it will live another 24.2 years.

Insurance companies are already coming up with their own twists on the product. The Phoenix Companies in Hartford, Conn., for instance, allows investors to increase their annual income by some percentage, so that their monthly checks rise in tandem with the cost of living. Most fixed immediate annuities do not provide for such an adjustment.

"People may be able to manage on the guaranteed income now, but later, they may be pinched by inflation, and that can really affect a standard of living," says Mark Tully, a Phoenix senior vice president and head of annuity distribution. "The biggest knock against this product was that it gave you a level income for life. We got around that with the escalating feature."

But before insurers can tout the product to investors, they must first sell it to their advisors, and that has been the industry's biggest challenge. While the product has received a lot of press and is one of the central topics of conversation at advisor conferences, the financial advisory community is being asked to sell something that is counter to everything they've been taught: Cultivate and grow your base of investor assets, don't give them away. When a broker or advisor sells an investor an annuity, the investor is likely to take assets the broker was managing and hand them over to an insurance company, never to see them again. The broker will receive a 4% cut initially, but it ends there.

"I've been working on the annuity side with advisors since 1994, and there is definitely an increased interest in the dialogue. I'm not yet certain the dialogue is transferring into sales," says Michael Lane, director of TIAA-CREF Advisor Services. "The broker has no incentive to sell it."

Fee-only advisors find the product problematic for a different reason, Lane says. The problem is not that they're being paid only once. It's that they will not be paid at all. They've given away the account, Lane says. "Every time we're in a room with fee or commission brokers and we talk about this, these are the big issues," Lane says.

With those issues, the product is going to have a hard time taking off, Lane says. Fixed immediate annuities are too complicated to pitch investors directly, and advisors are reluctant to sell them, he says.