A 10-year term certain annuity payout means that payments are guaranteed to be made for at least 10 years. If you were to pass away during the first year, payments would continue to your named beneficiary until 10 years after the first payment. After the initial 10 years, payments stop.

What does it mean when an annuity is annuitized?

Annuitization is the process of converting an annuity investment into a series of periodic income payments. Annuities may be annuitized for a specific period or for the life of the annuitant. Annuitants can arrange for beneficiaries to receive a portion of the annuity balance upon their death.

What does period certain mean on an annuity?

A period certain annuity pays out cash flows during the annuitization phase for a set number of years. This can be contrasted with a guaranteed lifetime annuity that pays out until the annuitant dies, which is an uncertain period of time.

What does ten year certain and life annuity mean?

Ten-Year Certain and Life Annuity. definition. Ten-Year Certain and Life Annuity means a monthly retirement benefit payable to the Participant for life, and if the Participant dies before receiving 120 monthly payments, such payments shall continue to the Beneficiary until a total of 120 payments have been made.

What happens when you die in a years certain annuity?

Should the annuitant die before the period ends, their beneficiary will receive the balance of payments until the period reaches its expiration. For example, if the annuity buyer chose a years certain annuity with a 10-year period, but they died in year eight, their beneficiary would receive payments for the remaining two years.

What makes a ” years certain annuity ” unique?

A years certain annuity is unique because it is income that is paid for a particular length of time. If the annuitant dies before the period ends, it is paid to the beneficiary for the remaining period.

What does it mean to have period certain annuity?

A period certain annuity is a contract that lets you choose when and how long you’ll receive payments. The income you receive from the annuity is guaranteed for the time period that you specify. This income would be paid to you, but can pass to a named beneficiary when you die. Say you had a lifetime annuity with a 10-year period certain.