Annuities✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
An annuity payout option that pays income for a fixed number of years and does NOT provide lifetime income is called:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A period certain, or term certain, annuity pays income for a fixed period, such as 10 or 20 years, regardless of whether the annuitant lives or dies. It provides no lifetime guarantee: if the annuitant dies before the period ends, the remaining payments go to a beneficiary, but if the annuitant outlives the period, payments stop. Because it lacks lifetime income protection, it generally pays a higher periodic amount than a life-contingent option.
Why the other options are wrong
- B) Straight life pays for the annuitant's lifetime and stops at death, with no guaranteed number of payments.
- C) Life with period certain combines lifetime income with a minimum payment period; it is life-contingent.
- D) Joint and survivor pays over two lives and continues until the second annuitant dies.
Memory hook
Period certain = fixed-duration payments with no lifetime promise; outlive the term and the checks stop.