Which annuity payout option allows the policyowner to choose a pre-determined number of benefit payments?

• A. Period certain
• B. Life annuity
• C. Joint and survivor
• D. Cash refund

Answer: (A)

Think about how long payments are guaranteed. The option that lets you set a fixed number of payments in advance is period certain. With this choice, you pick a specific number of payments (for example, 10 or 20 years). If the annuitant is alive, payments go for that full period; if they pass away before the period ends, the remaining payments still get made to a beneficiary until the predetermined count is reached. After the set number of payments, payments stop, regardless of death.

This is different from a life annuity, which pays as long as the recipient is alive; a joint and survivor, which continues as long as either there are is a recipient; and a cash refund option, which ensures the total payout equals or exceeds the original premium but based on life expectancy and a refund mechanism, not a fixed count of payments.