Which annuitization option typically offers the highest monthly payout?

The option that typically offers the highest monthly payout is the straight life annuity. This annuity type guarantees income for the lifetime of a single individual, meaning that the payments continue until the annuitant dies. Since the payout does not extend beyond the life of the individual, the insurer can offer a higher monthly payment compared to other options that provide funds over a fixed period, share payments between multiple beneficiaries, or include provisions for survivor benefits.

In contrast, a fixed period annuity pays out for a set term, regardless of the life expectancy of the annuitant, meaning monthly payments are lower to accommodate the fixed payment schedule. Variable annuities, while they can potentially yield higher returns based on investment performance, do not provide the guaranteed level of income like a straight life annuity, often resulting in lower monthly payouts for the same investment amount. A joint and survivor annuity, which continues to pay out until the death of both individuals involved, also offers reduced monthly payouts as it accounts for the risk of two lifetimes versus one.

Thus, the structure of a straight life annuity allows for a maximized monthly income by focusing exclusively on the lifetime of a single person, making it the most lucrative option in terms of monthly payouts.