Why Would You Purchase Life Insurance Rather Than Annuities? 
It depends on what you 're trying to accomplish . Annuities provide cash while you 're still living - Life insurance provides cash upon death of a person . With life insurance , you 're paying a continuous premium until the death of the insured or you no longer want the policy . In exchange for the premium , the carrier agrees to pay out the face amount as cited on the policy should the insured die during the life of the policy . With annuities , you 're paying a large sum of money -LRB- if single-premium annuity -RRB- or periodic payments -LRB- flexible premium periodic payment annuities -RRB- in exchange for the return of monthly payments with interest over a given time frame -LRB- various options -RRB- . Life insurance may be the more suitable route if you 're looking to settle debts , pay off estate taxes , etc. , so your family is not stuck with the bills when you die . An annuity may be more suitable if you 're looking to help plan for your retirement . In many situations , people will have both life insurance and annuities in their financial portfolio . 