For years, variable annuities got a bad rap from many financial advisers, thanks to the high fees charged to buyers. Now that these annuities have turned out to be among the best investments of the past decade, some of those advisers are on the defensive, explaining to clients why they didn't sell them the products, despite the fees.

A variable annuity is a tax-advantaged type of mutual-fund investing that in recent years typically has been sold with investment-performance guarantees. At the time, critics wondered why pay an insurance company for a pricey guarantee when stocks in the long run always rise?

Last year's steep market slide showed the value: In simplest terms, the guarantees commit the annuity issuers to paying lifetime income streams based on past market gains in the customers' underlying fund accounts, plus minimum annual increases in years when the market is sluggish. For those who hold the guarantees, retirement can proceed largely according to plan--a contrast to the millions of baby boomers who have watched big chunks of their portfolios evaporate.

In other words, these annuities' seemingly high fees paid for the investing-world equivalent of catastrophe insurance. The buyers have an insurance policy that they may call on given the disaster that struck the financial markets, and they're sleeping soundly as markets continue what could be years of erratic performance.

Unquestionably, guaranteed-minimum variable annuities are complicated and they have significant drawbacks. Among the biggest: As a general rule, there is no lump-sum option for cashing out the guaranteed amount. Instead, the sum that is guaranteed is payable by the insurer over time, with 5%-a-year payouts common for those in their 60s when they start receiving checks. If you cash out all at once, you get only the shrunken sum that remains in your funds—like a regular mutual-fund investor.

Another concern: The insurers must stay healthy enough to cut all those checks over a period of decades.

Relatively few financial advisers favored the guaranteed-minimum variable annuities in recent years. But those who did often were huge fans, putting a portion of the assets of many boomer clients into the products. More than 22 million variable-annuity contracts are in force, totaling more than $1 trillion in assets; the majority of those include some type of guarantee.

Other financial advisers have been scrambling to get up to speed on the products now that investor interest is keener than ever. But they're finding the best deals have been yanked from the market, because insurers have concluded that last year's prices were actually too low.

Still, for many investors approaching retirement who lack old-fashioned pension plans, even less-generous versions may make sense. If anything, the last year has driven market-battered investors to seek the comfort of a mostly sure thing.