In effect,an annuity provides insurance
A)against the risk of dying and leaving one's family without a regular income.
B)against the risk of living too long.
C)to people who are not risk-averse.
D)to people whose utility functions do not display the usual properties.

Question

Quizplus · Accepted Answer

An annuity provides insurance against the risk of living too long or outliving one's savings. It guarantees a regular income stream for the duration of the annuity, whether the annuitant lives for a shorter or longer time than expected. This provides protection against the risk of outliving one's retirement savings.

In Effect,an Annuity Provides Insurance