In its traditional meaning, an annuity offers a benefit that can’t be found in any other financial vehicle. What is that benefit?

Question

1. Proceeds that are paid upon the owner’s death
2. An income that cannot be outlived
3. Diversification
4. Tax deferral

Answer 1

The benefit that is traditionally associated with an annuity is:

2. An income that cannot be outlived.

Annuities are designed to provide a steady stream of income for a specified period or for the lifetime of the annuitant, which is a unique feature compared to other financial vehicles. This characteristic makes annuities particularly appealing for retirement planning, as they help ensure that individuals do not outlive their savings.