North Carolina Life Agent Practice Exam 2025 - Free Life Insurance Agent Practice Questions and Study Guide

A Straight Life Annuity is designed to provide the owner with guaranteed income for their entire life. This type of annuity pays out a fixed amount regularly for as long as the annuitant lives, which means that the income stream continues regardless of how long the individual may live.

The primary benefit here is the security that the owner will not outlive their income. Unlike other investment options that might risk depleting funds over time, a Straight Life Annuity assures that payments will continue as long as the contract holder is alive, thereby eliminating the concern of running out of funds in later years. This characteristic makes it an appealing choice for individuals seeking a stable source of income in retirement.

Other options do not align with the primary feature of a Straight Life Annuity. For instance, a one-time lump sum payment is more characteristic of a single premium immediate annuity or a different financial product, whereas variable income based on market performance pertains to variable annuities, which can fluctuate and do not guarantee a fixed income. Income that can be outlived is contrary to the defining feature of a Straight Life Annuity since this option explicitly ensures ongoing payments for the owner’s lifetime.