Group Life & AnnuitiesQuestion 113 of 315
Which annuity settlement option produces the largest periodic payment for a given premium, all else equal?
a.Life with 20-year period certain
b.Joint and 100% survivor
c.Straight life
d.Life with installment refund
Explanation
Straight life produces the highest periodic payment because payments end at the annuitant's death, with nothing payable to a survivor or beneficiary. Joint and survivor and any form with a guarantee or refund must cost something, so they lower the per-payment amount.
Law Reference: Cal. Ins. Code §10168.2Practice all 315 questions free — no signup required.
Related questions on this topic
- An indexed annuity has a 0% floor and a 6% cap. If the linked index returns negative 12% in a contract year, what interest is credited to the owner's account that year?
- Which statement best describes a single premium annuity?
- By definition, a single premium immediate annuity (SPIA) must begin making payouts to the annuitant no later than:
- A married couple wants lifetime income that continues to whichever spouse lives longer. Which annuity settlement option is the most common fit?
- What is the additional IRS penalty (on top of ordinary income tax) for taking a taxable withdrawal from a non-qualified annuity before age 59½?
- Which of the following exchanges is NOT permitted on a tax-free basis under Internal Revenue Code Section 1035?
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)