If an applicant wants a fixed annuity that pays benefits for life and provides a lump-sum death benefit if not fully paid out, which option should she consider?

The option that aligns with the applicant's requirements for a fixed annuity that pays benefits for life and provides a lump-sum death benefit if not fully paid out is "Life with period certain."

This type of annuity guarantees that the annuitant will receive benefits for their lifetime, ensuring that the applicant's desire for lifetime income is met. In addition, it also guarantees payments for a specified period (the "certain" period). If the annuitant passes away before this period concludes, the remaining payments are made to the beneficiary, either as continued monthly payments or as a lump-sum death benefit. This structure fulfills both aspects of the applicant's needs: the assurance of lifetime income and a death benefit that can be received if the annuitant does not live to fully exhaust the annuity's value.

In contrast, options like "Joint life with survivor," "Life with refund," and "Fixed-period installment" do not provide both elements as effectively. Joint life with survivor focuses on covering two lives, but it does not necessarily guarantee a lump-sum death benefit. Life with refund offers benefits for life with a return of the premium if the annuitant dies shortly after the start, but it may not provide a lump-sum