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.
References in periodicals archive ?
If the employee is single at retirement, he or she will receive a straight-life annuity.
This option can be elected as a straight-life annuity or as a joint and survivor annuity.
Benefits payable other than as an annual straight-life annuity must be actuarially adjusted to an equivalent straight-life annuity, under Sec.
The interest rate used to adjust benefits payable in a form other than an annual straight-life annuity and the limit for benefits payable before a participant's SSRA generally cannot be less than the greater of 5% or the rate specified in the plan.
The pension benefits discussed thus far were computed as if the retiree were to receive a straight-life annuity, that is, a periodic payment that ceases when the retiree dies.
19 The calculations are designed to provide to retiree and survivor a future stream of benefits that has a present value equivalent to the unreduced stream of payments from a straight-life annuity.