When you buy a SPIA, the premium and your age set the budget — but the payout option decides how that budget is spent. It is the one irreversible choice on the application, and the differences are bigger than most buyers expect. Here is what each option actually costs, using real July 2026 quotes for a 65-year-old man with $100,000.
The Four Payout Options at a Glance
| Option | Monthly Income* | What Happens When You Die |
|---|---|---|
| Life only | $664/mo | Payments stop. Heirs receive nothing. |
| Life + 10-year certain | ~$644/mo | Beneficiary collects any payments remaining in the first 10 years. |
| Life + 20-year certain | ~$598/mo | Beneficiary collects any payments remaining in the first 20 years. |
| Cash refund | ~$618/mo | Beneficiary receives your premium minus payments already made, as a lump sum. |
| 100% joint & survivor | $583/mo (couple, both 65) | Full payment continues for the surviving spouse's life. |
*Best available quote among 8 A-rated carriers, $100,000 premium, age 65 male (joint assumes both spouses 65), July 2026. Period-certain and refund figures are typical market pricing — exact quotes vary by carrier.
Life Only: Maximum Income, Zero Legacy
Life only is the purest form of longevity insurance and always the highest payment. Every dollar of actuarial value goes toward your own lifetime income; none is reserved for beneficiaries. It shines when your spouse and heirs are already provided for — through life insurance, a survivor's own assets, or the rest of your portfolio — and your goal is squeezing the most guaranteed income from each premium dollar.
The famous objection — "what if I get hit by a bus next year?" — is real but often overweighted. You buy homeowner's insurance hoping to never use it; a life-only SPIA is the mirror image. Still, if the thought would keep you up at night, protection is cheap:
Period Certain: The Cheap Insurance
Adding a 10-year period certain guarantees at least 120 payments are made — to you, or to your beneficiary if you die early. At current pricing it costs about 3% of monthly income ($664/mo becomes roughly $644/mo). That small haircut removes the worst-case scenario entirely, which is why 10-year certain is the most commonly elected option in the industry.
A 20-year certain roughly triples the cost (about 10% less income) because the insurer is on the hook until you'd be 85 regardless. It approaches the economics of a bond ladder and usually only makes sense when leaving payments to heirs is a primary goal.
Cash Refund: Your Premium Always Comes Back
The cash-refund feature guarantees that the total paid out — to you plus your beneficiary — never falls short of your original premium. Die after collecting $40,000 of a $100,000 premium and your beneficiary receives a $60,000 lump sum. Expect to give up roughly 6–8% of monthly income for it. Psychologically, this is the option that converts annuity skeptics: it makes "the insurance company keeps my money" impossible.
Joint & Survivor: Built for Couples
A joint-and-survivor SPIA covers two lives. With the 100% survivor level, the check never changes while either spouse is alive — a 65-year-old couple currently gets up to $583/month per $100,000. Electing 75% or 50% survivor levels raises the starting payment in exchange for a reduced check after the first death, which can fit couples whose expenses will genuinely drop.
One planning note: household expenses rarely fall 50% when one spouse dies, but household income often does (one Social Security check disappears). That asymmetry is why advisers most often recommend the 100% level. See our current joint rates by age.
How to Choose in Three Questions
- Is anyone else depending on this income? Spouse → joint & survivor. No one → life only or a certain period.
- Would an early death bother you financially or just emotionally? Financially (heirs need the money) → cash refund or 20-year certain. Emotionally → 10-year certain buys peace of mind for ~3%.
- Is maximum income the whole point? If the rest of your estate plan handles legacy, take life only and don't look back.
Whichever option fits, get quotes for two or three structures side by side — the pricing spread between carriers is often bigger than the cost of the protection itself. Request a free comparison quote and we'll show all options across 8 A-rated carriers at once.
