In terms of annuity payout options, which of the following best defines a life-only annuity option?

A life-only annuity option is designed to provide payments exclusively to the annuitant for the duration of their lifetime. This means that once the annuitant passes away, the payments cease, and there are no further payouts to beneficiaries or anyone else. The defining feature of this option is its simplicity and focus solely on the lifetime of the annuitant, making it a straightforward choice for those who want to ensure they receive a steady income throughout their lives without the concern of post-death payouts.

Other options present features that do not align with the definition of a life-only annuity. For example, options that involve payout continuation to beneficiaries or allow cashing out of the annuity with no penalties indicate flexibility not inherent to the life-only structure. Additionally, an option regarding fixed payout amounts overlooks the primary characteristic of a life-only annuity, which focuses on the annuitant's lifetime rather than investment performance or payout guarantees. This distinction emphasizes the essence of the life-only annuity option in straightforward income distribution.