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

a. Payments continue until the annuitant's death.
b. Payments are fixed and stop at a certain age.
c. Payments increase with time.
d. Payments are based on the stock market.

User Instinct
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1 Answer

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Final answer:

An individual straight life annuity guarantees payments that continue until the annuitant's death, offering a safer but fixed income stream that doesn't adjust for inflation.

Step-by-step explanation:

Concerning an individual straight life annuity, it is accurate that payments continue until the annuitant's death. This means that once an annuity is purchased, either in a lump sum or over time, the annuitant will receive a fixed sum of money every year for the rest of their life. Unlike options such as stocks or savings accounts which can fluctuate in value and returns, an annuity provides a steady income stream, making it a safer investment. However, because the payments are fixed, they do not adjust for inflation over time, which could lead to a loss of buying power in the long term.

User Maidi
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