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What is a life annuity?

A life annuity may help provide you with a paycheck for the rest of your life.

Two women talking

Will I outlive my retirement money?

It's a question many of us ask ourselves. After all, it's not easy to know how our retirement investments will continue to perform, how long we'll live or how much we'll actually be spending each month when we're done working. Worry can set in, when you'd rather be excited about what life after work could bring.

Patrick Blevins, a State Farm® agent in Waynesboro, Virginia, helps people ease that worry when he explains how an annuity (which some people refer to as a life annuity) can benefit them in retirement.

Keep in mind, the following information pertains to fixed annuities only. Variable annuities work differently and have an investment risk component.

A paycheck for life

Blevins explains, "A major concern people have about retirement is running out of money. An annuity from State Farm could ensure that you will never outlive your money in retirement.

"One way to have an income you might not outlive is with an immediate annuity. It's purchased with one lump sum, and you start receiving payments pretty much right away. Some companies also offer deferred annuities, where you purchase your annuity with a lump sum but choose a time in the future to start receiving payments."

What if I die too soon? 

This is a common concern Blevins hears a lot. "A big misconception is that if I give State Farm, say, $100,000, and I pass away after a couple of payments, State Farm keeps my money. That's not the case with most payout options.

"People who own annuities have a number of choices for their payout period, and probably the most common is the cash refund option. With this option, your beneficiary will receive a lump sum payment based on whatever portion of the initial amount that wasn't paid out to you, so it guarantees the return of principal. On the flip side, if you're still living once your initial investment has been paid out to you, you'll still continue to receive the same monthly payment for however long you live."

How does it fit into my retirement plan? 

An annuity can play an important role in a complete financial plan, especially for people who have accumulated monies and are retiring or already retired. As Blevins puts it, "Once customers understand how they can be a puzzle piece to their overall plan, they are really happy with them." Want to learn more? Your own local State Farm agent is here to help.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

Please consult your tax, legal, or investment advisor regarding your specific circumstances.

Neither State Farm nor its agents provide tax or legal advice.

State Farm Life Insurance Company (Not licensed in MA, NY or WI)
State Farm Life and Accident Assurance Company (Licensed in NY and WI)
Bloomington, IL



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