In an annuity, which option provides payments for the life of the annuitant with no residual guarantee after death?

• A. Joint and Survivor
• B. Life with Period Certain
• C. Straight Life
• D. Refund Annuity

Answer: (C)

The key idea here is how annuity payout options handle payments after the annuitant dies. Straight Life, or life-only, pays benefits for the lifetime of the annuitant and ends at death—there’s no continuation to a survivor or any guaranteed minimum to a beneficiary. That’s why it provides payments for the life of the annuitant with no residual guarantee after death. Other options include post-death guarantees: Joint and Survivor continues payments to a second person, Life with Period Certain guarantees payments for at least a specified period after death, and Refund Annuity guarantees the total payments will not be less than the premium (restored to a beneficiary if death occurs early). Therefore, the best choice for no residual guarantee is Straight Life.