Annuity with refund

Question: Is it better to buy a life annuity with refund or without refund?

If you buy a life annuity without refund, you get a higher monthly payout. If you choose an annuity with refund, you get a lower payout. The reduction depends on the type of refund.

For example, you can buy a life annuity that guarantees payment for 20 years. In the event of death within 20 years, the refund is 20 years of payment less the payment that has already been received.

For this type of annuity, the reduction is estimated to be about 20%.

Do you prefer to get 20% more, under a "no refund" annuity, or 20% less under a "with refund" annuity?

If you are in fairly satisfactory health and is not aware of any serious medical condition, it is better to buy a "no refund" annuity and get a higher payment.

If you are in poor health, it is better to buy a "with refund" annuity and get a lower payment, or to buy a annuity that pays for a fixed number of years.