IFSE Institute Exam LLQP Topic 1 Question 7 Discussion

A life annuity typically provides the highest monthly benefit compared to other annuity types because it does not include additional guarantees or features that reduce the payout, such as a guarantee period or indexing. Since Arianna is healthy and seeking the highest monthly income, a standard life annuity, which pays a fixed income for life without any additional features, will maximize her monthly benefit. LLQP resources confirm that adding options like guarantees or indexing typically lowers the monthly payout due to the insurer's increased liability.

Option B would provide a lower benefit than a standard life annuity because of the 10-year guarantee. Option C (Indexed annuity) would have lower initial payments due to the cost of inflation protection, and Option D (Joint life annuity) would provide less income as it is designed to continue payments to a surviving spouse.