In a straight-life annuity, when do payments cease?

In a straight-life annuity, payments are designed to continue for the lifetime of the annuitant. Once the annuitant passes away, the payments cease, but only after at least one payment has been made. This structure means that the annuitant receives a steady income for the duration of their life, providing financial security during retirement.

This option aligns with the fundamental definition of a straight-life annuity, which is structured to provide payments solely based on the life of the annuitant, and it operates without a guaranteed payout period. Other choices involve conditions that do not fit the definition of a straight-life annuity, like fixed terms or multiple annuitants, which are characteristics of different types of annuities such as period certain annuities or joint-and-survivor annuities. Thus, the structure of a straight-life annuity is clearly focused on the individual annuitant's lifespan, making the first option the correct choice.