Beneficiaries✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
Under a straight life (life-only) annuity with no period-certain or refund feature, if the annuitant dies shortly after payments begin:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A straight life annuity pays income for as long as the annuitant lives and stops at death; there is no period-certain and no refund feature. If the annuitant dies soon after income begins, the insurer keeps the remaining funds and nothing is paid to a beneficiary or the estate. The risk of early death is assumed by the annuitant, which is why the life-only option offers the highest monthly income. A beneficiary receives unpaid amounts only under payout options that include a period-certain or refund guarantee.
Why the other options are wrong
- B) No refund feature means there is no return of premiums at death. The straight life option assumes the risk of early death in exchange for higher payments.
- C) A minimum-payment guarantee exists only under period-certain or refund options. A straight life annuity has no such guarantee.
- D) Cash surrender value is an owner's right during life. It is not payable at the annuitant's death under a life-only option.
Memory hook
Straight life means for life, then nothing; no refunds, no heirs' share.