Washington Life Producer Practice Exam

Which annuity type provides payments only to the annuitant until death?

1. Life income

2. Refund annuity

3. Accumulation annuity

4. Joint lifetime annuity

The correct answer is: Life income

The life income annuity is designed to provide payments solely to the annuitant for the duration of their life. This type of annuity assures the annuitant receiving consistent income until death, making it an effective choice for individuals seeking to secure a steady stream of income throughout their retirement years. Since the payments cease upon the annuitant's death, this arrangement is straightforward, and no further funds are distributed to beneficiaries or estate after the annuitant passes away. In contrast, the other types of annuities offer different payout structures that do not align with the definition provided in the question. For instance, a refund annuity includes provisions for returning a portion of the investment to beneficiaries if the annuitant dies before a specified period. Meanwhile, an accumulation annuity focuses on building savings or investment over time rather than providing immediate income. Lastly, a joint lifetime annuity pays out to two individuals, usually spouses, until both have passed away, which extends the payment plan beyond just one annuitant. Therefore, only the life income annuity fits the criteria of providing payments exclusively to the annuitant until their death.