What is a characteristic of the pure life annuity settlement option?

The pure life annuity settlement option is characterized by its provision of the highest monthly benefit available to the annuitant. This option is designed to pay the annuitant a steady stream of income for as long as they live, starting at the time of annuitization. Since payments cease upon the death of the annuitant, this structure maximizes the monthly payout amount relative to other options, such as those that may guarantee a minimum payment period or provide for a beneficiary.

In contrast, options that involve a refund of principal or a guaranteed payout to beneficiaries often entail reducing the monthly benefit amount because the insurance company has to account for the potential additional payouts beyond the annuitant's lifetime. Therefore, the pure life annuity option stands out as offering the highest monthly benefit compared to options that include these additional guarantees. This focus on maximizing income for the lifetime of the annuitant underscores the essence of the pure life annuity's appeal.