What is a Life Only Annuity? A Life Only Annuity—sometimes called a straight life annuity—pays guaranteed income for as long as you live, and then stops at death. There is no continuing benefit for a spouse, and there is no refund of unused premium to beneficiaries. Because the insurer is not pricing in survivor payments or refunds, the life-only payout is typically the highest monthly income you can select from a given premium and start age.

For retirees focused on maximizing personal income, this structure can function much like a private pension. Instead of managing withdrawals from market-based accounts, you convert a lump sum into a contractually guaranteed paycheck that lasts as long as you do. If you are comparing this against other income designs, it helps to review joint lifetime income annuities, life with period certain annuities, and cash refund annuities so you can clearly see the income tradeoffs.

At Diversified Insurance Brokers, we help clients compare life-only payouts across multiple carriers and across different annuity types, including single premium immediate annuities (SPIAs) and deferred income annuities (DIAs). Some retirees also use a fixed annuity or fixed indexed annuity to grow funds first, then convert to lifetime income later.

Lifetime Income Calculator

Estimate your life-only payout and compare it against joint and refund structures using consistent inputs.

Note: If you are allocating more than $2,000,000, income scales proportionally at the same age and structure.

How a Life Only Annuity Works

A life only annuity exchanges a lump sum premium for income that continues for as long as you live. Once payments begin, the insurer is contractually obligated to continue paying—even if you live well beyond average life expectancy. In exchange for that guarantee, payments stop at death, with no residual value paid out.

This structure is most commonly used inside an immediate income annuity, but it can also apply when activating income riders inside certain deferred contracts. If you are evaluating growth-first strategies, you may want to understand how a roll-up rate works and how that differs from a guaranteed payout percentage at income activation.

Why Life Only Pays More

Income annuities are priced according to expected payout duration. When you choose life only, the insurer’s obligation ends at your death. There is no requirement to continue payments to a spouse and no promise to refund unused premium. Because the guarantee is narrower, the monthly income is typically higher.

When you add guarantees—such as spousal continuation, a period certain feature, or a refund option—the carrier is accepting additional risk. That added guarantee usually lowers the starting income. This is why retirees who prioritize maximum personal cash flow often gravitate toward life only.

When Life Only Makes Sense

A life only annuity is often appropriate for retirees who are single, widowed, or whose spouse has sufficient independent income. It can also fit households where other assets are earmarked for heirs and the annuity’s sole job is to create dependable income.

Some retirees pair life-only income with permanent life insurance to replace the legacy value that would otherwise be forfeited. Others simply rely on investment accounts or real estate to serve legacy goals. The annuity becomes a cash-flow engine, not an inheritance vehicle.

Comparing Life Only to Other Payout Options

If you are married, it is critical to compare life only with spousal continuation options and full joint lifetime income structures. Even if the life-only payout looks significantly higher, the long-term household impact must be considered.

If leaving money to beneficiaries is important, review how cash refund and period certain options adjust the payout while preserving some death benefit protection.

Rate Environment and Timing

Life-only income levels are influenced by prevailing interest rates and carrier pricing. Before locking in income, it can be helpful to review current annuity rates and compare how short-term fixed rates, multi-year guarantee annuities, and income annuities are positioned. In some cases, retirees stage funds into a 6-year annuity or other term structure before turning on lifetime income.

If you are also considering upfront credits, review how bonus annuities differ from traditional fixed contracts. Bonuses can influence account value but do not always translate directly into higher guaranteed lifetime income, so side-by-side comparisons are essential.