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Straight life annuity is a retirement planning product available through insurance companies, which makes regular payments to the annuitant (the person covered by the annuity) until death. This annuity provides the greatest measure of security that your surviving spouse will be income-secure in retirement. This type of annuity pays you as long as you live. Contrary to the terms of a single life annuity, which state that the cash value goes to the insurer, if the annuity holder of a period certain annuity dies before the end of the term, benefits will continue to a designated beneficiary for the remainder of the time period. You can also establish a payout schedule that distributes slightly larger amounts while both annuitants are still alive and then reduces the amount of income the surviving spouse receives by 25 to 50 percent. An individual can purchase an annuity and when the annuity distribution period begins or when the annuitization begins, the annuity will then pay the money back to the individual over a period of time. https://www.investopedia.com/terms/s/straightlifeannuity.asp What Is a Straight Life Annuity? While many types of annuities allow the annuity owner to name a beneficiary (usually a spouse) who will be eligible for either continued payments or death benefits, a straight life annuity forgoes this added benefit in favor of higher guaranteed payments while the annuitant is alive. SPD Navigation. A straight life annuity can be bought by a lump-sum payment or through a series of installments. Straight life annuity is a kind of retirement investment where one can get the highest level of the monthly benefit for life as an employee Never miss an important update Click Allow to get notified about important updates only. Continue reading Annuities. The straight life annuity might be right for you if you need to maximize the amount of income you receive and either don’t have dependents or are not planning to use the annuity for the purposes of estate planning. A fixed or variable annuity that pays a certain monthly or (rarely) annual sum for life of the annuitant and carries no death benefit. We appreciate your feedback. Straight Life Annuity. A life or straight life annuity is payable to an annuitant only during the annuitant's lifetime and ceases upon his or her death. In a perfect world, everyone would be blessed with a long, healthy, comfortable retirement. The amount of the payments is determined by the amount of the purchase payment and the annuitant’s age at the time the payments begin. straight life annuity. These products do not allow annuitants to designate a beneficiary. Learn how an investment today can provide guaranteed income for life. How to use annuity in a sentence. One of our content team members will be in touch with you soon. Annuities can be structured to accommodate a variety of payout schedules. Straight Life Annuity A fixed or variable annuity that pays a certain monthly or (rarely) annual sum for life of the annuitant and carries no death benefit. If the annuity holder dies before the end of the period, the payments for the rest of that time will … And one of the biggest challenges in developing a solid retirement strategy … An annuity is a contract between you and an insurance company. Assume the plan provides an immediate straight life annuity at age 60 of $163,800 and an immediate straight life annuity at age 62 of $182,000. Source: Merriam-Webster's Dictionary of Law ©1996. A life annuity provides a larger amount of monthly income than if a lump sum was invested and only the interest earnings were taken as retirement income. Therefore, the length of time that the insurance company will distribute the payouts will largely depend on how long the annuitant is going to live. Because these payments last longer — beyond the death of the first annuitant — payments are slightly lower. Variable Annuity: It is very different than the traditional fixed annuity. When G dies, the insurer: Does not have to make any further payments. This is different from a term annuity which only pays you for a fixed amount of time. As with every other feature of an annuity, payouts can be structured to suit your needs. Which type of contract liquidates an estate through recurrent payments? According to the Bureau of Labor Statistics, https://www.consumerreports.org/cro/2014/03/best-pension-payout-option/index.htm, https://www.bls.gov/opub/btn/volume-5/youre-getting-a-pension-what-are-your-payment-options.htm, Straight Life Annuity for Married Couples, Qualified Longevity Annuity Contract (QLAC), This article contains incorrect information, This article doesn't have the information I'm looking for, Life Annuity with Period Certain (Fixed Period/Guaranteed Term), Consumer Reports. There is no ongoing benefit to a beneficiary in the event of the member’s death. Unlike straight life annuities, joint and survivor annuities guarantee payments for the life of the contract owner and the life of one other person. No survivor benefit will be paid after your death. 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