What benefit does a pure straight life annuity provide?

A pure straight life annuity offers a specific benefit: it guarantees fixed payments for the lifetime of the annuitant without any stipulation for payment continuation after their death. This means that once the annuitant passes away, the payment stream ceases, and no additional payments or refunds are made to beneficiaries or estates.

This structure is designed to provide income for the lifetime of the annuitant only, ensuring that the individual is covered financially throughout their life, but it does not provide any death benefit or refund provision. As a result, the annuitant is essentially exchanging a lump sum of money for the peace of mind of guaranteed income for their lifetime, which will end with their passing without extending benefits to heirs. It is important to understand that this design is often attractive for those who prioritize a steady income stream over potential death benefits.

The other options imply features such as continued payments or refund guarantees that are not characteristic of a pure straight life annuity. In essence, this product prioritizes lifetime income and eliminates the complexities of refund options or beneficiary payments upon death.