Life Annuity With Period Certain

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Life annuities with period certain are a popular option for individuals seeking guaranteed lifetime income with added security for beneficiaries. This guide covers various types of period certain life annuities, highlighting their benefits and how they work.

What is a Life Annuity with Period Certain?

A life annuity with a period certain combines the features of a life annuity with a guaranteed payment period. If the annuitant dies before the end of this period, the payments continue to a beneficiary for the remaining time. This option ensures that the annuitant receives lifetime income and provides financial protection for beneficiaries.

How It Works

  1. Investment: The annuitant invests a lump sum or a series of payments to an annuity provider.
  2. Payments: The provider guarantees lifetime income to the annuitant.
  3. Guaranteed Period: A specified period (e.g., 5, 10, 15, 20 years) during which payments are guaranteed even if the annuitant dies.
  4. Beneficiary Protection: If the annuitant dies within the guaranteed period, the remaining payments are made to a designated beneficiary.

Types of Life Annuities with Period Certain

5-Year Certain and Life Annuity

Definition: Guarantees lifetime payments with a five-year period certain. If the annuitant dies within five years, beneficiaries receive payments for the remaining period.

Benefits:

  • Ensures lifetime income.
  • Provides financial security for beneficiaries for five years.

10-Year Certain and Life Annuity

Definition: Guarantees lifetime payments with a ten-year period certain. If the annuitant dies within ten years, beneficiaries receive payments for the remaining period.

Benefits:

  • Ensures lifetime income.
  • Provides financial security for beneficiaries for ten years.

15-Year Certain and Life Annuity

Definition: Guarantees lifetime payments with a fifteen-year period certain. If the annuitant dies within fifteen years, beneficiaries receive payments for the remaining period.

Benefits:

  • Ensures lifetime income.
  • Provides financial security for beneficiaries for fifteen years.

20-Year Certain and Life Annuity

Definition: Guarantees lifetime payments with a twenty-year period certain. If the annuitant dies within twenty years, beneficiaries receive payments for the remaining period.

Benefits:

  • Ensures lifetime income.
  • Provides financial security for beneficiaries for twenty years.
Life Annuity With Period Certain

Pros and Cons of Life Annuities with Period Certain

Pros

  • Lifetime Income: Guarantees income for the lifetime of the annuitant.
  • Beneficiary Protection: Provides financial security for beneficiaries within the guaranteed period.
  • Predictability: Fixed payments provide a predictable income stream.

Cons

  • No Death Benefit Post-Period: No payments to beneficiaries after the guaranteed period ends.
  • Lower Interest Rates: Typically offer lower interest rates compared to other investment options.
  • Loss of Control: Once the annuity is purchased, the funds are locked in and cannot be accessed for other purposes.

Considerations

When choosing a life annuity with period certain, consider your financial goals, the length of the guaranteed period, and the needs of your beneficiaries. These annuities are suitable for individuals seeking lifetime income with the added security of guaranteed payments to beneficiaries.

Life With Period Certain Annuity

Conclusion: What We Recommend

Life annuities with period certain are an excellent option for those looking to secure lifetime income while providing financial protection for beneficiaries. Evaluate your financial situation and goals to determine the best type and period certain option for you.

For personalized advice or a quote, contact us for free guidance tailored to your financial needs.

Life Annuity With Period Certain Quotes

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Frequently Asked Questions

Which type of annuity guarantees a stated number of payments?

A life annuity certainly provides an income with a guaranteed stated number of payments.

A life annuity with a period certain is characterized as

 A life annuity with a certain period is characterized as a hybrid annuity payment option that provides lifetime payments with guaranteed income for a specified number of years.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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