straight life annuity

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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. Generally speaking, an annuitant buys a straight life annuity and makes installment payments for it throughout his/her working life. Following retirement, the annuitant begins to receive the benefit, the amount of which may or may not be fixed in the annuity contract. A straight life annuity is designed to provide a stable income for the annuitant in retirement. Most straight life annuities make larger payments than other annuities because there is no death benefit. See also: Income annuity, Pension, IRA, 401(k).

straight life annuity

An annuity that makes payments to the recipient only for the duration of his or her lifetime. No minimum number of payments and no minimum sum to be paid are guaranteed. All payments end upon the recipient's death. This annuity is desirable for someone with no dependents who wishes to obtain the largest possible payments.