What are annuities designed to provide?

Annuities are financial products specifically designed to provide regular payments to an individual or their beneficiary over a specified period of time. This structured payout can be particularly beneficial for individuals seeking a steady income stream during retirement or for other planned financial needs.

In the context of the correct answer, annuities can be set up to start disbursing payments immediately or at a future date, thus aligning with the retirement timelines or other financial planning strategies of the individuals. The flexibility in timing and structure is a key feature of annuities, which makes them an attractive option for those looking for reliability in their future cash flow.

The other choices present alternatives that do not accurately represent the primary purpose of annuities. While options may discuss aspects like cash returns or guaranteed growth, these do not capture the essence of what annuities are fundamentally intended to do: provide structured payments. Similarly, while some types of annuities may focus on retirement income, suggesting they are solely for retirement benefits or tax-free is misleading, as there can be tax implications depending on the type of annuity and the tax laws applicable.