Brad funded a life annuity through installment payments. At age 60, he decided to elect an annuity settlement option and to begin to receive payments. Which of the following life income options will provide Brad with the highest monthly income?
A) life annuity (no refund)
B) life income with payments guaranteed for 5 years
C) life income with payments guaranteed for 10 years
D) installment refund annuity

Respuesta :

Answer:

A) life annuity (no refund)

Explanation:

The other option will be lower as there are premium on the fact Brad may die in the next few years and  thus; and acquaintance will take either the guaranteed payment or the refund in the annuity.

As the first option doesn't allow for this, it will provide the highest monthly income to Brad.