Final answer:
A pure life annuity provides fixed monthly payments to an individual until their death, with no residual value after their passing. It is a lower risk retirement income option compared to other investments and does not include a death benefit or allow borrowing against cash value.
Step-by-step explanation:
Among the options provided, the one that best describes a pure life annuity is B) Offers fixed monthly payments until death. A pure life annuity is a financial product that provides individuals with a steady stream of income for the rest of their lives. Once the annuitant pays a lump sum or makes a series of payments to the insurance company, they will receive fixed monthly payments from the company until their death, without any residual value to beneficiaries. Unlike cash-value (whole) life insurance, there is no death benefit or cash accumulation that can be borrowed against or combined with other insurances like long-term care coverage.
Saving for old age is an essential consideration, and private market options like annuities offer a secure way to ensure steady income after retirement. They are generally considered to be lower risk compared to other investment options such as stocks and bonds, providing retirees with financial stability and peace of mind.