Annuity Certain

DEFINITION of 'Annuity Certain'

A financial instrument that provides a stream of payments, for a predetermined number of years. An annuity certain will continue a stream of payments remitted to the annuitant's beneficiary or estate, if the annuitant dies before the payment term ends. The payments are made on a regular schedule, such as monthly, quarterly, semiannually or annually.

BREAKING DOWN 'Annuity Certain'

In contrast, a life annuity remits a stream of payments to the annuitant for the duration of his or her life, rather than ending on a predetermined date. If the life annuity's guaranteed period has not expired at the time of the annuitant's death, however, the annuity will continue to make payments to the annuitant's beneficiary or estate, until the guaranteed period ends.

RELATED TERMS
  1. Straight Life Annuity

    An insurance product that makes periodic payments to the annuitant ...
  2. Guaranteed Minimum Income Benefit ...

    A type of option that annuitants can purchase for their retirement ...
  3. Whole Life Annuity Due

    A financial product sold by insurance companies that requires ...
  4. Payout Phase

    The phase in an annuity during which payments are made to the ...
  5. Annuitization Method

    A type of annuity distribution structure that gives the annuitant ...
  6. Period Certain

    An annuitization-method option with which the annuitant selects ...
Related Articles
  1. Markets

    Explaining Types Of Fixed Annuities

    Learn about this popular retirement tool, its pros and cons and how annuities work to create a guaranteed regular stream of retirement income.
  2. ETFs & Mutual Funds

    Annuities

    What annuities are: Insurance products that provide a source of monthly, quarterly, annual or lump sum income during retirement. Pros: Tax-deferred growth of earnings; no annual contribution ...
  3. Markets

    Introduction To Annuities: Basics of Annuities

    In the introduction, we learned about the history and purpose of annuities. In this section, we will explore the mechanics of these contracts and the basic characteristics that apply to all forms ...
  4. Retirement

    Analyzing The Best Retirement Plans And Investment Options: Annuities

    What they are: Insurance products that provide a source of monthly, quarterly, annual or lump sum income during retirement. Pros: Tax-deferred growth of earnings; no annual contribution limit; ...
  5. Retirement

    Buying Annuities in a Low Interest Rate World

    Learn if buying an annuity makes sense in a low interest rate environment. Also discover the different types of annuities and how interest rates affect them.
  6. Retirement

    How to Use Annuities for Retirement Income

    We explain how to use annuities for guaranteed income in retirement.
  7. Retirement

    How a Fixed Annuity Works After Retirement

    These popular investments can provide a steady stream of income during your retirement years. Here are the details.
  8. Retirement

    Immediate Annuities: Guaranteed Payout At A Price?

    This vehicle can have very low, or even negative, rates. Find out when it pays to invest.
  9. Financial Advisor

    Annuities and Baby Boomers: The Pros and Cons

    The pros and cons of annuities that Baby Boomers seeking retirement income need to know.
  10. Retirement

    How a Variable Annuity Works After Retirement

    These investments can provide extra income after you retire. Here’s a guide to when and how you will receive the payout.
RELATED FAQS
  1. What should my 85 year-old mother do with a deferred annuity she purchased in 1992?

    Retirement of the plan is May 2016. She had a one time investment and has never taken money out of the plan. ... Read Answer >>
  2. What are the main kinds of annuities?

    Learn about the four basic types of annuities, and why the different investment and payout options are suitable for different ... Read Answer >>
  3. What is the difference between a fixed and variable annuity?

    Understand the difference between fixed, variable and indexed annuities, and read a brief summary of their respective risks ... Read Answer >>
  4. For what types of financial instruments would I want to calculate the present value ...

    Learn about the types of financial instruments the present value of an annuity calculation is most useful for, including ... Read Answer >>
  5. What is a longevity annuity?

    Understand all the characteristics of a longevity annuity contract, the purpose of a longevity annuity and what type of investor ... Read Answer >>
  6. In the separate account of a variable annuity, which of the following characteristics ...

    The correct answer is b. When the holder of a variable annuity contract annuitizes the contract, he/she is asking that the ... Read Answer >>
Hot Definitions
  1. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  2. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  3. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  4. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  5. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
  6. Security

    A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship ...
Trading Center