Life Income with Period Certain
A settlement option paying income for the beneficiary's life with a guaranteed minimum number of years, so payments continue to heirs if the beneficiary dies early.
Drill all 803 terms as flip-card flashcards in the Exam Engine →
Practice This Concept
A beneficiary elects a settlement option that guarantees a specific number of payments even if the beneficiary dies before the period ends, but pays less per month than a straight life option. This option is the:
Life income with period certain — The life income with period certain option pays income for the beneficiary's lifetime but guarantees a minimum number of payments, such as 10 or 20 years certain. If the beneficiary dies before the certain period ends, the remaining payments go to a contingent payee. Because the insurer guarantees at least a minimum payout, the monthly amount is lower than under a straight life option, which stops at death with no guarantee. The fixed period option is not life-contingent, and interest only leaves the principal intact.
National insurance concept
A beneficiary selects a life income settlement option with a 10-year period certain. What does the beneficiary receive?
A guaranteed income for life, with payments guaranteed for at least 10 years even if the beneficiary dies early — A life income with period certain settlement option pays the beneficiary an income for life and guarantees that payments will continue for a stated minimum period, here 10 years. If the beneficiary dies before the 10-year period ends, the remaining payments go to a designated recipient for the balance of the period. If the beneficiary lives beyond 10 years, the payments continue until death. This option combines the security of a lifetime income with a guarantee to the beneficiary's estate or designee, and it generally pays a smaller monthly amount than a pure life income option.
National insurance concept
Practice all life insurance questions →