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2 How do I buy a life annuity? Only life insurance companies can sell you a life annuity. A financial advisor needs to hold a life insurance licence in order to sell life annuities. Such an advisor can discuss your particular needs and circumstances and recommend which annuity options might be suitable for you. What is the cost of an annuity? Life annuities cost more than other types of arrangements because they provide guaranteed payments over your lifetime. When interest rates are low, the cost of annuities rises, since there will be relatively less income earned on your investment. Insurance companies take into consideration three pricing components - investment yield, mortality and expenses. Also built into the cost of the annuity are regulatory requirements for insurance companies to set aside certain reserves and capital. These requirements allow insurers to guarantee payments for as long as you live. Some may argue that other investments can offer greater returns, but only an insurance industry annuity guarantees payments for life. The monthly income that you will receive from your annuity will depend on several factors: your age (is your life expectancy likely to be another 10 years or another 30 years?); your health (if it is poor and your life expectancy is lower than average, you could qualify for an "impaired-risk annuity" which would provide greater monthly income); current long-term interest rates; whether you choose a single life or joint annuity; what guaranteed period you choose and any other options you choose to add. For instance, a single-life annuity (on your life only) will produce a higher monthly income, based on the same capital, than a joint- and-last-survivor annuity. Likewise, a short guarantee period will produce a higher monthly income than a longer guarantee period. The annuity market is highly competitive. A financial advisor can obtain quotes based upon your circumstances and choices and help you find the best solution.