Well this is the first time I have ever read an article about life annuities that bring out the main points in such an easy to understand way.
Life annuities are about security; there is no expiration date. Remember that, no expiration date. While your friends are trying to figure out their bonds and stock funds, you have deposited each month in your bank account, a cheque which will go on forever for you and your spouse.
Coupled with social security in the US and OAS in Canada, life annuities provide a carefree guaranteed income. You don’t compare this to a return on a CD or a GIC because you have changed your mindset. Instead of worrying about interest rates and which fund to trust, you have made a choice. You’ve stopped looking at the fees on your ever-changing mutual funds and have traded those worries for a secure income.
Remember to always differentiate between life annuities and variable annuities which normally have all sorts of bells and whistles. With a life annuity you trade your money for a secure income. That is why you buy a life annuity.