Which statement best describes a Pure Life annuity?

• A. It guarantees payments for a fixed term
• B. It continues payments to beneficiaries after death
• C. It pays income for the life of the annuitant and ends at death, with no remaining estate value
• D. It returns unused premiums to the estate

Answer: (C)

A Pure Life annuity is about providing income for as long as the annuitant lives, with no guarantee period and no death benefit or remaining cash value left to heirs. The payments continue until the annuitant dies and then stop, which means there’s nothing passed on to the estate once death occurs. This is why the statement describes income for the life of the annuitant and ends at death with no remaining estate value.

This differs from a fixed-term annuity, which would pay for a set number of years regardless of how long the person lives. It also differs from options that continue payments to beneficiaries after death or that refund unused premiums to the estate, both of which involve guarantees or post-death payments not present in a Pure Life annuity.