Why is a life annuity the most popular type of structured settlement option?
Life annuities provide lifetime financial security and transfer the risk of living a long time to the insurance company. The hardest part of any financial plan is not having the foresight to know how long an annuitant will live. For example, consider a 45 year old male wanting to invest $250,000 into a period certain annuity. If he received $20,000 a year, his money would be depleted in 18 years. With a life annuity, he could receive $16,000 a year, for the rest of his life, for the same $250,000 cost.
