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Which of these statements concerning an individual straight life annuity is accurate

(A) A straight life annuity provides greater monthly dollar payments than a life annuity with a period certain.
(B) A 100% joint and survivor annuity will provide a larger benefit than a 50% joint and survivor benefit.
(C) A father would use a period certain if he wanted benefits to continue at least until his 15-year-old son turns 25.
(D) A life annuity with 10 years certain will provide larger benefits than a life annuity with 20 years
certain.

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Final answer:

Statement (A) is correct; a straight life annuity provides greater monthly payments than a life annuity with a period certain because it has no guaranteed payout period.

Step-by-step explanation:

The correct statement concerning an individual straight life annuity is: (A) A straight life annuity provides greater monthly dollar payments than a life annuity with a period certain. This is because a straight life annuity only pays out for as long as the individual lives, with no guaranteed payout period, whereas a life annuity with a period certain has a lower payment to account for the guaranteed payout even if the individual passes away during that period. (B) A 100% joint and survivor annuity will potentially provide a smaller benefit than a 50% joint and survivor benefit because it has to last for the lifetimes of both individuals. (C) A period certain annuity would indeed be used if a father wanted to ensure that benefits would continue for a specific period such as until his son turns 25. (D) A life annuity with 10 years certain does not necessarily provide larger benefits than a life annuity with 20 years certain; the certainty period does not typically affect the amount of the individual payments but guarantees that the payments will continue for a minimum period after the annuitant's death.

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