Final answer:
An Individual Straight Life annuity guarantees lifetime income for the annuitant, but does not include a spouse, adjust for inflation, or allow for a lump-sum withdrawal.
Step-by-step explanation:
The correct answer to the question concerning an Individual Straight Life annuity is that it guarantees lifetime income for the annuitant. Therefore, option A is incorrect, as it does not include the annuitant's spouse. Option B is also incorrect because this type of annuity does not provide payments for a specific term but rather for the lifetime of the annuitant. An Individual Straight Life annuity does not address inflation adjustment, so option C is inaccurate. Lastly, option D is incorrect since this type of annuity does not allow for the withdrawal of the entire sum at any time; payouts are typically fixed and distributed over the life of the annuitant.
Individual Straight Life annuities are often chosen by retirees as part of their retirement planning. Although these annuities provide a steady stream of income, they do not typically offer inflation protection, which means that over time, the buying power of these fixed payments can diminish. Adding inflation protection to an annuity plan or choosing a different type of annuity that adjusts for inflation might be useful for those concerned about the erosion of their income’s purchasing power.