Why do many investors prefer variable annuity payments under the straight-life payout option?

Many investors prefer variable annuity payments under the straight-life payout option primarily because it provides the maximum cash flow of all payout options. This payout structure is designed to offer the highest potential income for the annuitant during their lifetime, as payments continue until death, without any further payouts to beneficiaries.

Investors appreciate the straight-life option because it maximizes the use of their investment, allowing for larger monthly payments compared to options that guarantee payments for a certain period or provide benefits to heirs. Consequently, those seeking to maximize their retirement income find this option particularly appealing, as it allows them to enjoy a more substantial financial resource throughout their lifetime.

Other payout options might limit cash flow to ensure a certain payment period or secure assets for beneficiaries, which may result in smaller monthly payments for the investor. Thus, the straight-life payout option aligns with the goals of those who prioritize maximizing their income during retirement.