What is a Single-Life Annuity primarily used for?

A Single-Life Annuity is primarily designed to provide a steady income stream for an individual during retirement, making it a valuable tool for supplementing retirement income. This financial product ensures that the annuitant receives regular payments for the remainder of their life, which can help them manage living expenses and maintain their standard of living in retirement.

This type of annuity is particularly important for individuals who may not have a pension plan or sufficient savings to cover their financial needs in later years. By converting a lump sum of money into guaranteed payments, a Single-Life Annuity effectively addresses longevity risk—the possibility of outliving one’s savings.

While it may touch on other aspects of financial planning, such as asset protection or the availability of funds for educational needs, the primary role and most significant benefit of a Single-Life Annuity lies in its capacity to provide reliable income throughout retirement.