Insurance companies are in the business of helping people manage risk. In the case of income annuities (SPIAs, DIAs, and QLACs), the insurance company is taking on your longevity risk, or the risk of that you outlive your savings. They need to balance offering an attractive value proposition for you with maintaining a responsible risk profile (as required by law) and running a profitable business. For each contract, the insurance company performs an actuarial projection matching the premium you pay with the expected present value of the stream of income they can offer. To do this, they factor in your life expectancy (how long they expect to make payments), the interest rate environment (the returns they can generate on your behalf), the expenses they incur in administering the product, and the profit they require to make it worthwhile.