With baby boomers beginning to enter retirement, it's no surprise variable annuity sales were up 16.7% in 2006, according to Insurance Information Institute. And it's a good indication that these types of products are becoming increasingly popular tools to manage personal wealth. On the other hand, insurers are being challenged to offer more competitive products such as living benefits, while lowering costs to attract more sales. Although the market is improving its product diversity, there are a few basic things you should consider while shopping around. All variable annuities, regardless of whether purchased through a bank or mutual fund, are essentially an agreement between you and an insurance company. This means the financial security of the insurer cannot be ignored. A financial rating can give a good indication of an issuer's financial health and is an important factor to consider. Although variable annuities are placed in separate accounts from an insurer's general account and are not subject to claims by policyholders, a company with financial troubles can still impede policyholders from recovering their investments. This alone is a good reason to select a financially strong company. Once you have found a well-rated company, you need to consider the costs, such as front-end loads, back-end loads (also known as surrender charges), mortality and expense risk charges, annual contract fees and optional feature fees.