Which annuity payout option guarantees payments for a specified period even if the annuitant dies early?

• A. Fixed dollar
• B. Period certain
• C. Pure life income
• D. Joint life income

Answer: (B)

The payout option that guarantees payments for a specified period is the period-certain option. It promises a fixed number of payments to be made, and if the annuitant dies before that period ends, the remaining payments still go to a named beneficiary. For example, if you select a 10-year period and you die after 3 years, the remaining 7 years of payments continue to the beneficiary. If the annuitant lives the full period, payments simply run for the entire term.

Other options don’t provide that fixed-term guarantee. A fixed-dollar payout guarantees a set payment amount but not a guaranteed number of payments. A pure life income pays as long as the annuitant lives but ends at death with no continuation to heirs. Joint life income continues while either person is alive and may adjust after one dies, but it isn’t defined by a fixed period.