Which payout option provides the highest monthly income for a life annuity?

The pure life annuity option provides the highest monthly income because it offers payments to the annuitant for as long as they live, with no guarantees for payments beyond the individual’s life. This structure maximizes the monthly income compared to other options, as the insurer is not obligated to continue payments after the annuitant’s death.

In contrast, a joint and survivor annuity is designed to provide income for two individuals, usually a married couple, ensuring that payments continue for the survivor after one dies. This results in lower monthly payments than a pure life annuity.

A term certain annuity guarantees payments for a specific period, regardless of whether the annuitant is alive or not, which often leads to lower monthly payments since the risk of payment cessation at death is spread over a predetermined period.

An installment refund annuity guarantees that, if the annuitant passes away before receiving total payments equal to the principal invested, the remaining amount will be paid out to beneficiaries. This option typically provides lower monthly payments compared to a pure life annuity because of the additional guarantee it offers.

Therefore, the pure life annuity stands out as the option that yields the most substantial monthly income for a single life.