What is the primary goal of a life insurance policy annuity?

The primary goal of a life insurance policy annuity is to provide financial support during retirement through regular payments. Annuities are designed to transform a lump-sum investment into a stream of income, often utilized by individuals looking to secure a steady cash flow in their retirement years. This allows insured individuals to have a predictable source of funds to cover living expenses, maintain their standard of living, or meet any other financial needs that may arise in retirement.

Annuities can be particularly beneficial since they may provide guaranteed payments for a certain period or even for the lifetime of the annuitant. This feature helps to mitigate the risk of outliving one's savings, which is a significant concern for many retirees. The option of regular payments is what distinguishes annuities from other financial products in the realm of life insurance.