Washington Life Producer Practice Exam

Which of the following annuity payout options makes no additional payments regardless of when the annuitant dies?

1. Life only

2. Joint and survivor

3. Period certain

4. Life with period certain

The correct answer is: Life only

The annuity payout option that makes no additional payments regardless of when the annuitant dies is the life only option. With this option, the annuitant receives payments for as long as they are alive. Once the annuitant passes away, the payments cease immediately, and there are no further distributions made to beneficiaries or any remaining parties. This feature highlights the inherent risk in choosing the life only option, as if the annuitant dies shortly after starting to receive payments, the total benefits could be significantly lower than what was contributed. In contrast, other options, such as joint and survivor, period certain, and life with period certain, provide some form of payment continuation. Joint and survivor options ensure that payments continue to a surviving spouse or partner after the first annuitant dies. Period certain guarantees a minimum payment period, ensuring that if the annuitant passes away before this period ends, payments will still be made to beneficiaries for the remainder of that timeframe. Life with period certain combines life payments with a guaranteed minimum payout period, allowing for payments to continue for a specific duration even if the annuitant dies early. Therefore, the life only option is distinctive in that it carries the greatest risk of payment cessation upon the annuitant's