Ace the Chartered Life Underwriter Challenge 2026 – Secure Your Success and Dominate the Exam!

Annuities are primarily designed to provide a steady stream of income during retirement, making option B the correct choice. This feature distinguishes them from life insurance products, which are generally focused on providing a death benefit to beneficiaries upon the insured's passing. Annuities come into play when individuals want to ensure they have a reliable income source for a specific period or even for their lifetime, often used to supplement retirement savings.

While some life insurance products can build cash value, this aspect is secondary to the primary purpose of life insurance, which is to protect dependents financially after the policyholder's death. Thus, while both concepts involve financial planning, their core functions differ significantly, with annuities being associated with living benefits and income generation.

The other options touch on various aspects of life insurance but do not capture the unique role of annuities. For instance, although life insurance can accumulate cash value, this feature does not relate to annuities directly. Furthermore, the notion that both are designed for short-term financial needs is misleading; annuities and life insurance are typically long-term financial products, aimed at addressing different portions of an individual's financial strategy.