straight life annuity

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 a decedent was receiving a straight life annuity, there is no property interest remaining at the decedent's death to be included in the decedent's gross estate.
While a straight life annuity will result in the highest total annual payments to the annuitant, it is rarely the best choice, because the risk of losing one's investment before recovering the principal is too much of a psychological barrier during the purchase process.
The Contracts are available in several different forms, including a straight life annuity, a life annuity with a guarantee period, and a life annuity with various types of refund features.
Choosing a period-certain guarantee liquidity option results in a lower payment compared to a straight life annuity.
If the decedent was receiving a straight life annuity, there is no property interest remaining at his death to be included in his gross estate.
However, if the surviving spouse receives a straight life annuity, there is no property interest remaining at his death to be included in his gross estate.
If payments were made under a straight life annuity, payments cease upon the annuity holder's death; there is no remaining property interest, nothing is passed to survivors, and nothing is included in the annuity holder's estate.
As one would expect, the overall valuation of the annuity is lower for all households for the simple reason that a life-plus-20-year period-certain product has lower payouts than a straight life annuity.
Typically, the acquisition of a straight life annuity covering the annuitant's life will not give rise to an estate inclusion.
Likewise, the proceeds will qualify if they are payable to the surviving spouse under a straight life annuity settlement with no refund or period-certain guarantee (no portion of the proceeds would be payable to any other person after her death).