Life insurance policies and annuities are both contracts between individuals and insurance companies

Annuities can help protect investors from outliving their retirement savings

While an annuity is also a contract between an individual and an insurance company, a life insurance policy differs in that it protects the beneficiaries in the event of the policyholder’s death.

Annuities differ from life insurance policies in a few key ways, such as when they're paid out and who they benefit

Annuities are intended to benefit the plan owner, and benefits are paid out during the owner's life. The person who buys life insurance rarely sees those benefits—they're intended instead for heirs and dependents.

Annuities are financial products typically used by retirees looking for guaranteed income streams

Specifically, annuities are contracts between an individual and an insurance company that require the insurance company to make regular payments to the individual.

People with annuities (annuitants) tend to skew older, with most approaching retirement age

However, others also invest in an annuity contract when they come into a large sum of money, like an inheritance. There are lots of myths surrounding annuities, such as the idea that they're only for the wealthy.

While annuities can guarantee an income for risk-averse investors, they may play it too safe for others

Whether or not an annuity is the right investment option depends on the buyer’s unique needs. People who plan to retire soon are more likely to opt for the lower-risk investment, but there may be opportunity costs for people seeking higher returns.

Life insurance offers peace of mind, ensuring that loved ones are financially supported after one's passing

People typically apply for life insurance policies through specific companies or online marketplaces. This video offers more information that's important to know when considering buying life insurance.

Annuities have two core phases: the accumulation phase and the annuitization phase

During the accumulation phase, individuals invest in their annuity with financial contributions. The annuitization phase is when the annuity is paid out.

The two main types of life insurance are term and permanent

The biggest difference between the two is how long they cover the life of the insured person and how much they cost. This guide can help you learn more about term and permanent life insurance, plus their different variations, to choose the right policy for you.

Investments into an annuity are typically locked up during the accumulation period

For one year, most annuitants won’t be able to withdraw any funds. After that, most contracts allow them to take out up to 10% of their accumulated total annually before fees—called surrender charges—are applied to their withdrawals.

Life insurance can can cover funeral expenses, loss of income, and more

Life insurance can act as a financial safety net if your main financial provider dies. Among other things, it can cover any debts that were left behind. In this video, a Yahoo Finance contributor dives into why life insurance could be the key financial protection your family needs.

Life insurance policies are often recommended for people with financial dependents

If you’re a parent, spouse, business owner, homeowner, or if you hold a lot of debt, you might want to consider life insurance. It can replace a loss of income or pay off debt.

A 'death benefit' can replace lost income, pay for a funeral, or leave a legacy

Those beneficiaries are usually family members. In exchange, the policyholder pays a monthly fee for coverage. It’s normally used to cover the life of a financial provider.

Annuities are regulated at the state level

However, certain types of annuities, like indexed annuities, are also nationally regulated by the SEC and the Financial Industry Regulatory Authority to protect investors.

Final life insurance is most common for people over the age of 50

Final expense life insurance is a type of life insurance where, instead of paying a sum of money to your beneficiaries after death, the insurance covers the expenses for your funeral, burial, and any end-of-life care.

Permanent life insurance offers access to a cash value account, which is like a savings account

It's a huge perk of purchasing permanent life insurance. Policyholders often use these accounts as another investment tool. In this podcast episode, NerdWallet experts break down how you can use your cash value account to invest, plus the pros and cons of this tactic.

If someone buys a $100K annuity, they may receive $525 to $1K monthly payments

In general, how much an annuity will pay out depends on a variety of factors, including how old an annuitant was when they bought it and what type of annuity they bought. Regardless, annuities can provide a guaranteed extra income for retirees.

Most life insurance policies cover death by natural causes or accidents

However, some other causes aren’t always covered. Suicide in the first two years of coverage, high-risk activities or jobs, and war or terrorism aren’t typically covered by life insurance, for instance. However, some added benefits (or “riders”) can account for some of these situations.

Annuitants have to pay income taxes on the annuity payments they receive, unless their annuities are folded into a Roth IRA

In most other cases, annuities grow tax-deferred until annuitants start to receive payments. Those payments are then taxed as regular income. Nonqualified annuities, which are bought with after-tax dollars, have different rules.

If you decide to buy term life insurance, coverage will eventually expire

If you decide to buy term life insurance, you’ll no longer have coverage once the agreed-upon timeframe is over. You can always plan ahead to pay off major expenses before your coverage ends, but if this doesn’t happen, you may need to renew or replace your policy.

Life insurance premiums can cost anywhere between $80 and $1K a month, depending on the policy

A life insurance premium is essentially the monthly cost or fee someone pays to an insurance company in exchange for a specified sum of money after their death to their beneficiaries. Factors like term length, health and lifestyle, and any added benefits can impact your premium.

Cash balance pension plans provide the option of a lifetime annuity

Specifically, these defined-benefit plans are retirement plans that differ from traditional pensions in that they can come in one lump sum rather than in monthly payments. These plans are most popular among small business owners and their employees. Learn more about them in this article.

Lottery winners have two choices: lump sums or annuities

Lottery winners can receive either a lump sum or a yearly payout for 30 years. If they take the lump sum, they can receive only about 60% of the winnings—and that 60% is then taxed. If they choose to receive the annual payout as an annuity, there are tax strategies they can use to minimize how much they owe.

The concept of life insurance likely originated in ancient Rome around the year 100 BCE

However, life insurance policies didn’t reach the Americas until 1759, when life insurance started being used to protect the families of Protestant ministers when said ministers died. This timeline of life insurance’s early history—and how it has evolved since then—provides more details.

Revocable trusts are typically subject to estate taxes

Irrevocable trusts, however, are not. Both types help beneficiaries avoid probate, the lengthy court process that administers a person’s estate upon death.

Find out the difference between prediction markets, sports betting, and investing

As one expert put it, "investing is a long-term strategy to build wealth over time, speculation is an attempt to predict the future, and gambling is a game of luck."

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Apeirophobia is an overwhelming fear of living forever, perhaps stemming from the brain's inability to conceptualize an infinite life.

A Yale student wrote a profound essay about the consulting industry's influence on elite college students that was published in a book of her writing after she died in a post-graduation car accident.

An initial public offering or 'IPO' is the process of a private company becoming public by putting shares of the company on the stock market for purchase.

Volcanoes 'die' when their supply of magma runs out, if they are shifted away from their underlying magma reservoir, or if they get clogged by collapsing or their magma cooling back into rock.

In 1939, baseball star Lou Gehrig delivered his inspirational 'Luckiest Man' speech after retiring due to the health condition that now bears his name.

A vending machine run with Anthropic's AI went out of business after it was convinced to give away items for free and sell a video game console.

About 2,000 US babies are born annually without some portion of their limbs, potentially leading to a lifetime of pricey prosthetics.

Dozens of S&P 500 stocks, including Coca-Cola and Walmart—known as the dividend aristocrats—have increased dividends every year for 25 years

Corals are themselves not coral reefs—the term refers to the tiny marine invertebrates that build the rigid reef.

Despite being favored by 87% of Americans, Congress does not have term limits.

Cultural norms about how to handle the bodies of loved ones in communities in West Africa have hampered Ebola responses.

Frank Lloyd Wright's houses are historically hard to sell because they're old, subject to local landmark commissions, and often unfashionable

Alzheimer's can lead to brain shrinkage, with an average of around 2% of volume reduction per year

For centuries, Niagara Falls has been a magnet for daredevils seeking to conquer one of nature's most powerful wonders, with its 200-foot drop and water rushing at 32 feet per second with 280 tons of force.

Power lines are dotted with large, brightly colored balls to improve the visibility of these thin wires to helicopters and small planes and help prevent potential crashes.

Abraham Lincoln was almost assassinated weeks before his inauguration as he traveled from Illinois to DC through Baltimore in 1861; it took two independent claims for Lincoln to be convinced the threat was real

See this overview of the firework rules across all 50 states, ranging from a complete ban on non-professional fireworks in Massachusetts to states with more lax rules like Indiana.

In 2026, Finland was named the world's happiest country for the ninth consecutive year based on its wealth, social safety network, and high life expectancy, among other factors.

To reduce wrinkles in clothing, research recommends gentle wash cycles with more water and tumble drying with smaller loads and longer times.

The Beatles' US label rejected the band's first two singles, 'Please Please Me' and 'From Me to You,' with one executive calling the band 'dead in the water.'

Poison ivy is in the same family as mangoes, cashews, and pistachios—and they all produce oily urushiol in their raw, unprocessed state—but they are typically prepared in ways to avoid causing human discomfort.

Pure water does not conduct electricity because this flow of energy requires the movement of charged particles, and water is a neutral molecule.

While El Niño moves warm Pacific Ocean waters east along the equator, La Niña moves them west, shifting where rainfall will become more common for months.

Browse a detailed visual analysis of over 200,000 similes—comparisons that often use 'like' or 'as'—from popular fiction to see how frequently writers the same idiomatic expressions.