What type of protection does a fixed life annuity offer?

A fixed life annuity provides protection against savings depletion due to longevity. This means it ensures that the annuitant will receive a steady stream of income for their lifetime, regardless of how long they live. This feature is particularly valuable for individuals concerned about outliving their savings, as it offers financial security through regular payments that continue as long as the annuitant is alive.

While a fixed life annuity does have certain aspects related to interest rates and market conditions, its primary characteristic is the provision of guaranteed income, which directly addresses the risk of running out of funds in retirement due to an extended lifespan. Hence, the focus on longevity risk underscores its role in retirement planning, providing a reliable source of income that is crucial for maintaining one’s standard of living in later years.