Which income option offers the largest monthly payment for a given amount of annuity funds?

Choosing the straight life income option provides the largest monthly payment for a given amount of annuity funds because it is designed to pay benefits for the life of the annuitant only, without any guarantees or additional features that extend payments to beneficiaries or require payments for a predetermined period.

In this arrangement, once the contract is in force, the insurance company takes on the full risk, as they do not have to continue making payments after the annuitant passes away. Therefore, the total payment made will be higher compared to options that have longer payment guarantees.

For instance, options like period certain or life with period certain not only involve paying out during the annuitant's lifetime but also ensure that payments continue for a specified duration, which typically results in lower monthly payments. Joint life income expands the period of payout to include another person, usually leading to a lower monthly amount because the insurance company must account for the longer duration of payout. In summary, the format of straight life income allows for the most significant payment amount to be allocated to the individual annuitant, reflecting the basic principle of risk and reward inherent in the design of annuity products.