[jessriedel]

No, that doesn't insure against old age. Consider this method of getting a guaranteed income: take your pot of money M and divide it by N, where N is the maximum number of years you could expect to live (if, say, you lived to 121). Then you can get a guaranteed income of M/N per year. But this is silly, because most of the time you die much earlier, and the money goes to waste.

The whole point is to transfer money from worlds where you die early to worlds where you die late. An annuity does this by pooling your money with many people living to different ages. For a large pool and accurate actuarial tables, the number of people who die every year can be predicted, so one can determine an amount of money to pay out each year such that each surviving person gets the same amount each year, with long-surviving people getting more total money (as desired).