What is a Life Annuity/Straight Life Annuity?
It is a stream of payments guaranteed to a given individual for as long as that individual remains alive. Many annuities are provided to an individual as a condition of employment or, as in the case of Medicare, as a condition of having reached the age of 65, including pensions and Social Security benefits. Individuals may also purchase annuities from insurance providers. Any annuity that is limited to payments based strictly on the survival of the owner of the annuity is called a “life annuity.” “Blended annuities” may add various special provisions such as that the payments will be guaranteed for a number of years, even if the individual dies, or that some part of the annuity payment amount will continued for the remainder of the life of a widowed spouse.
