Which annuity option guarantees payments for life with a guaranteed period if death occurs within that period?

Which annuity option guarantees payments for life with a guaranteed period if death occurs within that period?

• A. Pure life
• B. Life with period certain
• C. Life with refund
• D. Life with contingent payments

Answer: (B)

Payments that blend lifetime payments with a minimum guarantee. This option provides money for as long as the insured is alive, but also locks in a guaranteed period. If death happens during that guarantee period, the remaining scheduled payments are made to a beneficiary for the rest of the period. If the insured lives beyond the guarantee period, payments continue to the insured for life and no further payments are made after the period ends. That combination—paying for life while ensuring a minimum payment period if death occurs early—fits the description. The other designs don’t match: pure life has no survivor guarantee; life with refund focuses on returning principal rather than guaranteeing a period of payments; and life with contingent payments isn’t the standard form of a guaranteed-period option.

Payments that blend lifetime payments with a minimum guarantee. This option provides money for as long as the insured is alive, but also locks in a guaranteed period. If death happens during that guarantee period, the remaining scheduled payments are made to a beneficiary for the rest of the period. If the insured lives beyond the guarantee period, payments continue to the insured for life and no further payments are made after the period ends. That combination—paying for life while ensuring a minimum payment period if death occurs early—fits the description. The other designs don’t match: pure life has no survivor guarantee; life with refund focuses on returning principal rather than guaranteeing a period of payments; and life with contingent payments isn’t the standard form of a guaranteed-period option.