You will receive the largest monthly payment under an annuity contract when the annuity disbursement option is the:
A) life annuity with no refund.
B) life annuity, period certain.
C) refund annuity.
D) annuity certain.
E) temporary life annuity.

Question

Quizplus · Accepted Answer

A life annuity with no refund typically offers the largest monthly payment because the payments cease upon the annuitant's death, without any obligation to refund any portion of the principal. This option involves a higher risk for the beneficiary, as no benefits are paid out after their death, allowing the insurer to pay higher monthly amounts.

You Will Receive the Largest Monthly Payment Under an Annuity