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

Investors often prefer the straight-life payout option for variable annuity payments primarily because it offers the highest cash flow of all options available. This option guarantees that the annuitant receives regular payments for the duration of their lifetime, without any payments continuing to a beneficiary after death. This structure means that the full amount of the invested capital can be utilized to provide higher periodic payments during the individual's life, maximizing cash flow while they are alive.

Other payout options typically involve a reduction in payment amounts to ensure that beneficiaries receive payments after the annuitant’s death, or they may be structured to provide some level of return of principal, which limits the amount available for the annuitant during their lifetime. Thus, the straight-life payout is particularly attractive to those who do not prioritize death benefits for heirs and prefer maximizing their income during retirement.