What is the primary purpose of a life annuity?

The primary purpose of a life annuity is to provide regular income payments for the lifetime of the annuitant. This financial product is designed to convert a lump sum of money into a steady stream of income, ensuring that the individual receives consistent payments, making it particularly beneficial during retirement when individuals may not have a regular paycheck.

A life annuity is especially valuable for individuals seeking financial security in their later years, as it mitigates the risk of outliving their savings. By receiving these payments for life, the annuitant can better manage their expenses and maintain a desired standard of living, providing peace of mind regarding their financial future.

Other options, while they might describe certain features of financial products, do not align with the core function of a life annuity, which is fundamentally about providing an ongoing income rather than a one-time payment or investment accumulation.