Period Certain Annuity

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

What is a Period Certain Annuity?

Definition

A Period Certain Annuity, also known as an annuity certain, is a type of annuity that provides guaranteed payments to the annuitant for a specified period.

How It Works

  • Payment Duration: The payments are made for a fixed term, such as 10, 15, or 20 years.
  • Beneficiary Benefits: If the annuitant dies before the end of the term, the remaining payments are made to a designated beneficiary.

Key Features

  1. Guaranteed Income: Provides a steady income for a set period.
  2. Death Benefit: Ensures beneficiaries receive payments if the annuitant dies early.
  3. Fixed Term: The payment period is predetermined and does not fluctuate.

Examples

  • 10 Year Certain And Life Annuity: Pays out for 10 years, regardless of the annuitant’s life span.
  • Lifetime Annuity with 20-Year Period Certain: Provides income for life, but if the annuitant dies within 20 years, the beneficiary receives the payments for the remaining term.
10 Year Period Certain

Comparison to Life Annuities

  • Life Annuities: Pay as long as the annuitant lives but may not offer beneficiary benefits.
  • Period Certain Annuities: Pay for a fixed period, providing more certainty for estate planning.
20 Year Period Certain Annuity

Comparison of Annuity Types

Annuity TypePayment DurationBeneficiary BenefitIdeal For
Period Certain AnnuityFixed Term (e.g., 10-20 years)Yes, for the remainder of the termThose seeking guaranteed income for a specific period
Life AnnuityLifetime of the annuitantUsually noneThose seeking lifetime income
10 Year Period Certain Annuity

Conclusion

Period Certain Annuities offer a blend of security and predictability, making them suitable for individuals who want assured income for a specific timeframe and wish to provide for beneficiaries if they pass away prematurely. They are a reliable choice for structured income planning.

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Period Certain Annuity

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Questions From Our Readers

What does a 30-payment annuity mean?

It means the annuity will provide payments for 30 periods (months, years, etc.).

What is annuity certain?

An annuity certain is a type of fixed-term annuity that guarantees a specific number of payments for a predetermined period, regardless of the annuitant’s lifespan. This arrangement provides a guaranteed income stream for a set period, typically from a few years up to several decades.

What is a 5-year period certain annuity?

A 5-year period certain annuity is a financial product that guarantees payouts for a fixed term of 5 years. It provides a steady income stream for the specified duration, offering security to the annuitant. This type of annuity ensures that payments will continue for the full 5-year period, regardless of the annuitant’s lifespan.

What is a 10-year period certain annuity?

A 10-year period certain is a type of annuity guaranteeing payments for a minimum of 10 years, even if the annuitant dies before the period ends. This ensures beneficiaries receive the remaining payments until the agreed-upon time frame expires, providing a financial safety net for the annuitant’s loved ones.

I’m 84. Can I get a 10-year certain and life annuity? Would this be wise for someone my age?

You can get a 10YR Period Certain and a life annuity at age 84.
We would generally recommend one that does pay a lifetime income instead of a period certain due to the risks of outliving the funds on a period certain.  Even at age 84, there is a good chance that could happen.

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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