West Virginia State Life Insurance Practice Exam

Which type of annuity provides a guaranteed income for life, but may not include a death benefit?

1. Straight life annuity

2. Joint life annuity

3. Variable annuity

4. Indexed annuity

The correct answer is: Straight life annuity

A straight life annuity is designed to provide a guaranteed income for the lifetime of the annuitant. This type of annuity ensures that the individual will receive regular payments as long as they live, which can be appealing for those who are seeking financial independence during retirement and want the security of a predictable income stream. One key characteristic of a straight life annuity is that it typically does not offer a death benefit. This means that once the annuitant passes away, the payments cease and there is no remaining value to be passed on to heirs or beneficiaries. This can be an important consideration for individuals who prioritize lifetime income over estate planning in their financial strategy. The other types of annuities mentioned, such as joint life annuities, variable annuities, and indexed annuities, often include features associated with death benefits, withdrawal options, or investment growth potential, which distinguishes them from a straight life annuity.