Variable Annuities
Assuming equal account values and annuitant age, which variable annuity payout option would provide the HIGHEST monthly payment?
More guarantees = lower payment. Straight life = highest payment, no guarantees.
Complete Analysis & Legal Rationale
A straight life annuity provides the highest payment because it has no guarantees beyond the annuitant's life. Period certain options and survivor benefits reduce payments because the insurer assumes greater risk of paying longer.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Matches the verified teaching point in the explanation.
Period certain guarantees reduce monthly payments compared to straight life.
A 20-year period certain would have lower payments than a 10-year certain.
Joint and survivor options reduce payments to cover two lives.
Official Standard: Governs options accounts, approvals, and related supervisory requirements (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.