Years Certain Annuity
Candlefocus EditorThe annuity is structured so that the annuitant will receive money for the particular time period they have chosen, normally 10 or 20 years. If the annuitant dies prior to the end of the payment term, then the annuity will carry forward and will be paid out to the beneficiary for the remainder of the term. This is why it is called a years certain annuity, because it guarantees that the annuitant or the beneficiary will receive an income for the number of years stated.
These annuities are funded by either a single premium or an accumulation of contributions over a period of years. Depending on the annuity chosen, there may also be returns from investments or from additional payments from the annuity provider. The types of investments and the actual return of the annuity will depend on the annuity provider chosen.
The years certain annuity has many advantages, including tax deferment until withdrawal. An additional advantage is the peace of mind knowing that income will be received, regardless of any other sources. The annuitant can plan their financial future without worrying about losing their income due to death or other factors.
The years certain annuity products are designed to provide a secure retirement income. They offer peace of mind knowing that the annuitant or the beneficiary will receive some income for the specified time period. While the annuity provider will determine the actual return on the investment, annuitants should remember that this type of annuity comes with certain risks and should be carefully considered when making a financial decision.