Which feature of annuities can help manage longevity risk?

The feature of annuities that helps manage longevity risk is the provision for a steady income stream for a lifetime. Longevity risk refers to the uncertainty about how long a person will live and poses a significant challenge to financial planning in retirement. With a steady income stream for life, annuities ensure that individuals do not outlive their assets, providing a consistent source of income regardless of how long they live. This feature allows retirees to maintain their standard of living without the fear of depleting their savings too early, which is particularly valuable as life expectancies increase.

The other features mentioned do not specifically address the issue of longevity. For example, fixed payments regardless of lifespan offer a stable amount but do not extend the payments if the individual lives longer than expected. The ability to withdraw funds anytime without penalties provides flexibility but does not assure continued income once the principal is depleted. Likewise, a guaranteed surrender value at all times is more related to liquidity and access to funds rather than ensuring income for life. Therefore, the option that directly protects against living longer than one's savings is the one that provides a steady income stream throughout the individual's lifetime.