What Is a Straight Life Retirement Annuity?
A straight life retirement annuity is a product being sold by insurance companies. This retirement plan makes payments to the annuity holder at regular intervals until his death. Straight life annuity does not assist any beneficiaries after the annuitant's death. The policy is best suited for individuals looking for a steady cash flow in retirement.
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No Beneficiary Policy
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Straight life retirement annuities only make payments until the annuity holder's death, at which point the payments cease. For this reason, the annuity holder cannot designate a beneficiary.
Multiple Premium
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Straight life retirement annuities can be bought through installments, which means the annuity holder can make payments through multiple premiums over the course of his working life.
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Single Premium
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The policy can also be bought through a single premium, in which the annuitant gives a single lump sum and in return, receives periodic payments. Lump sum purchase is usually made at the retirement point.
Cash Flow
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The straight life retirement annuity policy is typically designed for individuals who are chiefly concerned with having a steady flow of income rather than securing the financial future of beneficiaries after death.
Less Expensive
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Since the insurance company does not provide financial assistance to beneficiaries, the straight life retirement annuity policy is relatively less expensive than other types of life insurance policies that do pay beneficiaries.
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