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Health and Life Insurance

Category - Annuities & Policies

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Much like life insurance, annuity contracts have a variety of settlement options available. What does a life annuity - no refund offer mean to the annuitant?

Larger payouts, ends upon death; no beneficiary payments
Longer payouts, beneficiary receives payouts upon death of annuitant
Larger payouts, and beneficiary receives payouts upon death of annuitant
Longer payout, no beneficiary payments

Explanation

Answer: A - Life annuity - no refund means the annuitant receives larger payout sums over the course of repayment; however, there are no beneficiary payments upon death. Excess money is kept by the insurance company. The risk to the annuitant is not living long enough to receive payouts in the contract and the potential for losing it all.

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