Straight Life Annuity


DEFINITION of 'Straight Life Annuity'

An insurance product that makes periodic payments to the annuitant until his or her death, at which point the payments stop completely. These products do not allow annuitants to designate a beneficiary. Straight life annuities may be bought over the course of the annuitant's working life by making periodic payments into the annuity, or they may be purchased with a single lump sum payment. Usually, lump sum purchases are made at, or shortly after, the annuitant's retirement.


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BREAKING DOWN 'Straight Life Annuity'

Because these products make no payments to beneficiaries and no further payments after the annuitant's death, they are less expensive than other life insurance products that do pay out to beneficiaries. The catch is that people who buy these types of annuities with their life savings do not have the option of continuing to support their dependents once they have died.

  1. Annuity

    A financial product that pays out a fixed stream of payments ...
  2. Life Insurance

    A protection against the loss of income that would result if ...
  3. Fixed Annuity

    An insurance contract in which the insurance company makes fixed ...
  4. Dependent

    An individual whom a taxpayer can claim for credits and/or exemptions. ...
  5. Annuitant

    1. A person who receives the benefits of an annuity or pension. ...
  6. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
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