Judy has $500,000 with which to purchase a single-premium annuity. Which annuity should she buy if she wants to maximize her monthly liquidation payment?

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The straight life annuity is designed to pay out a specific amount each month for the rest of the annuitant's life. Because there is no guarantee of payments beyond the annuitant's lifetime, this type of annuity typically offers higher monthly payouts compared to annuities with guarantees, such as the 5 year period certain or installment refund annuities. Therefore, for Judy's goal of maximizing her monthly liquidation payment, the straight life annuity would likely be the best choice.

Judy Has $500,000 with Which to Purchase a Single-Premium Annuity