Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Specific to Life Insurance and AnnuitiesMedium
A Florida resident, age 67, is considering purchasing an annuity. The agent explains that this annuity will pay out a fixed income for as long as the annuitant lives, but payments will cease upon their death, with no further benefits to beneficiaries. What type of annuity payout option is being described?
- ALife Annuity with Period Certain
- BJoint and Survivor Annuity
- CRefund Annuity
- DLife Only Annuity
Show answer & explanationAnswer & explanation
Correct answer: D. Life Only Annuity
A Life Only Annuity, also known as a Straight Life Annuity, provides payments for the entire life of the annuitant, but payments cease completely upon their death, offering no benefits to beneficiaries. This option typically provides the highest periodic payment.
Why the other options are wrong
- A. A Life Annuity with Period Certain guarantees payments for a minimum period, even if the annuitant dies.
- B. A Joint and Survivor Annuity continues payments to a survivor after the primary annuitant's death.
- C. A Refund Annuity guarantees that at least the purchase price will be paid out, either to the annuitant or their beneficiary.
Life Only Annuity
An annuity payout option that provides income for the annuitant's lifetime, ceasing entirely upon their death, with no payments to beneficiaries.
- Highest periodic payout among life options.
- No death benefit or payments to heirs.
- Maximizes income for the annuitant's life.
Memory trick: Life's choices: just you, or a guarantee for two.