There aren't a ton of retirement products that can guarantee you a steady income stream until you die, but annuities, which are pitched as a way to ensure you won't outlive your money during retirement, are one of them. With an annuity, you hand over a lump sum of money to an insurance company, and you get a reliable stream of income in return. That predictability can be extremely valuable in any economic landscape, but it may be especially appealing right now, given how volatile the stock market has been, how much longer people are living and the economic uncertainties that are looming. 

But as reassuring as annuities may seem, the reality is that these retirement products can also be quite confusing. There is a wide range of annuities to choose from, after all, and there are different terms, payout structures and investment options that can make annuities function quite differently from one another. That leaves many future retirees wondering what exactly they're signing up for, and whether those steady payments they've been promised will really last as long as they need them to.

So, do annuities deliver on the promise of giving you a steady income stream for life? Or can an annuity run out of money and stop paying? Below, we'll take a closer look.

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Whether or not an annuity can run out of money depends heavily on the type of annuity you have. In general, immediate and lifetime annuities are designed not to run out of money as long as the issuing insurer remains solvent. That's because these annuities guarantee income for life, no matter how long you live. Once you hand over a lump sum to the insurance company, the insurance company takes on the longevity risk. So, even if you live to 100, they're contractually obligated to keep paying you.

That means as long as the insurer is still in business, any general, immediate and lifetime annuities you open are contractually obligated to continue your payments, and the only way that will change is if the insurance company goes out of business. However, there are scenarios where an annuity can and will stop providing income. These include:

It's worth noting that while many annuities offer "guaranteed income," those guarantees are only as solid as the financial health of the insurer. If the company goes out of business, your payments could be at risk, though some protections exist at the state level.

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If you're worried about outliving your annuity, it may be worth using these strategies and safeguards to help protect against losing your payments later in retirement:

This is the simplest way to ensure payments last for as long as you live. Lifetime annuities typically provide lower monthly payouts than term annuities, but they offer the peace of mind that you'll never outlive your income.

Some annuities, like variable and indexed annuities, offer optional income riders for an extra fee. These riders often include lifetime income guarantees, even if your account value drops to zero. Just make sure you fully understand the terms before committing.

Don't rely on an annuity alone to get through retirement. Combining annuity income with other types of retirement income, like Social Security, pensions, investment withdrawals and emergency savings, can help prevent financial gaps if one stream slows or stops.

Annuity payments are only as safe as the company issuing them. Look for providers with strong financial ratings from agencies like A.M. Best or Moody's. You can also check your state's guaranty association for information about coverage limits in the event the insurer fails.

If your annuity has a free withdrawal clause or allows regular distributions from your principal, don't be tempted to pull more than what's recommended. Overdrawing can shorten the life of your contract and diminish any future income.

If you're considering adding an annuity to your retirement plans, don't just assume that guaranteed means foolproof. Annuities can run out of money, but whether yours lasts depends on the structure of the annuity, how you use it and how well the insurance company behind it holds up. Some products, like lifetime immediate annuities, are designed to provide income you can't outlive, while others, particularly those tied to investment performance or limited terms, carry more risk. So, make sure you're doing your homework, choosing the right annuity and adding the right features to mitigate the chances that your payments stop before you're ready for them to.