In an annuity with a fixed period payout, which option ensures a predetermined number of payments?

• A. Life income
• B. Life income with period certain
• C. Period certain
• D. Cash refund

Answer: (C)

Period certain guarantees a fixed number of payments. With this option, the annuity is set to pay for a specific period (for example, 10 or 20 years). If the annuitant dies before the period ends, the remaining scheduled payments are continued to a beneficiary to complete the term. If the period ends while the annuitant is still alive, payments stop then. So the total count of payments is fixed, matching a fixed-period payout.

Life income pays as long as the annuitant lives, so the number of payments isn’t fixed. Life income with period certain also guarantees a period, but it combines lifetime payments with the period guarantee for a survivor; the total number of payments can vary based on how long the person lives. Cash refund is about returning the purchase amount to the beneficiary rather than guaranteeing a set number of payments.