Only Annuities Guarantee Lifetime Income

What You’ll Find on This Page

• Why Only Annuities Guarantee Lifetime Income
• Structuring Income for You and Your Spouse
• How Lifetime Income Works
• Common Misunderstandings About Life-Only Payouts
• Alternatives to Annuitization
• How Annuity Income Compares
• Lifetime Income Examples at Age 65
• Annuitization vs. Income Rider
• Which Option Fits You?
• Final Thoughts

Among all financial tools, only annuities can provide guaranteed lifetime income. No other product offers this level of protection. Thanks to actuarial science and reserve requirements, insurance companies are uniquely positioned to deliver contractual payments that last as long as you live.

Whether you’re planning for a decade of retirement income or a much longer horizon, annuities let you customize payout structures—while insulating your payments from market swings.

Maximize Lifetime Income for You and Your Spouse

You can structure lifetime income for yourself and your spouse using joint payout options. The more guarantees you build in—such as survivor benefits or minimum payment periods—the more protected the income stream becomes. However, more guarantees typically reduce the monthly payout. A “life-only” annuity provides the highest income but ends at your death, while joint life and life with period certain options offer continuity for your spouse or heirs at a slightly lower amount.

The key advantage? Even after your premium has been fully paid out, the insurance company must continue sending income for life.

Lifetime Income Keeps on Giving

Once you begin lifetime payments through annuitization, the insurance company assumes the risk of both longevity and investment performance. You relinquish control of the remaining value, but receive consistent, reliable income that continues for life.

One tradeoff to consider: If you pass away shortly after payments begin and haven’t selected a period-certain or refund option, the remaining value stays with the insurer. That’s why many retirees opt for life payouts with a 10- or 20-year minimum payment period to ensure benefits for their loved ones.

Why Most People Don’t Choose the Life-Only Payout

For instance, if someone invests $100,000 into a life-only annuity and passes away after receiving just one $500 payment, the remaining balance is forfeited. To avoid this, many prefer period-certain riders that guarantee payments for a set number of years—regardless of how long the annuitant lives.

These options are also available on joint life or joint with period certain contracts. Alternatively, you can structure payments for a defined time period (e.g., 30 years), which can support estate planning or legacy goals.

Other Options if You Want More Control of Your Money

If you prefer to maintain some access to your funds, fixed index annuities with income riders offer a flexible alternative to annuitization. These riders provide guaranteed lifetime income while allowing for limited control over the contract. In some cases, you can start, pause, or adjust income payments.

This added control can be especially helpful when managing taxes, responding to life changes, or planning around cash flow. Foxcove Financial can help you evaluate whether an income rider aligns with your goals.

Do Annuities Pay More Than Other Instruments?

Often, yes. Annuities may deliver higher lifetime income than traditional options like CDs, bond funds, or even individual bonds—primarily because insurers pool longevity risk across a large group of policyholders. Bond funds, in contrast, rely solely on interest rates and offer no lifetime guarantees.

Even U.S. Treasury securities, while backed by the government, generally don’t match annuity payout levels. And unlike bond income, annuity payments remain fixed once started—even if interest rates rise in the future.

Instrument	Principal Guarantee	Lifetime Income	Flexibility
Fixed Index Annuity (with rider)	✅	✅	✅
Immediate Annuity	✅	✅	❌
Bond Fund	❌	❌	✅

Illustrative Income Examples at Age 65

The table below provides hypothetical income ranges based on 2025 market data. These examples are not guarantees and actual results vary by contract terms, insurer, and client profile. All guarantees are backed by the financial strength of the issuing insurance company.

Premium	Payout Type	Estimated Monthly Income
$100,000	Life Only (Male, Age 65)	$700 – $750
$100,000	Life Only (Female, Age 65)	$660 – $710
$100,000	Joint Life (Both Age 65)	$580 – $630
$100,000	Life with 20-Year Certain	$620 – $660

Annuitization vs. Income Rider

Trying to decide between annuitizing your contract and using an income rider? Here’s a side-by-side look:

Feature	Annuitization	Income Rider
Lifetime Income	✅	✅
Access to Principal	❌	✅ (with limits)
Flexibility to Pause or Adjust Income	❌	✅ (in many contracts)
Irrevocable Decision	✅ (Once annuitized, you can’t reverse the payout or access remaining funds)	❌ (You retain control over the contract)

Example:

• Mike, age 67: Wants maximum guaranteed income. He chooses annuitization to receive the highest monthly payout available.
• Lisa, age 65: Prefers some flexibility and access to funds. She selects a fixed index annuity with an income rider for lifetime income and partial control.

Who Each Option Might Be Right For

• Annuitization: Suited for someone seeking the highest guaranteed monthly income and who does not need future access to the principal.
• Income Rider: Ideal for someone who wants flexibility, potential access to funds, and more control over income timing.

Which Income Strategy May Be Right for You?

Your Priority	Suggested Strategy
Highest monthly income with no need for access to principal	Annuitization
Lifetime income plus limited control over your money	Fixed Index Annuity with Income Rider
Want income protection for heirs if you pass early	Life with Period Certain or Refund Option
Need the flexibility to pause or adjust payments	Income Rider

Final Thoughts

Planning for lifetime income is a cornerstone of retirement security. Annuities—especially fixed index annuities with income riders—offer a reliable solution with contractual guarantees and long-term protection.

If you’re considering options for steady retirement income, Foxcove Financial can help you assess your choices within the scope of fixed annuities and insured retirement strategies.