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Common Annuity Payout Options
When you are ready to start receiving payouts from an annuity, the accumulated value
of the annuity will fund your benefit payments. The payout settlement option provision
in an annuity contract describes the available payout options. Below, you'll find some
of the most common ones.
Period Certain
Amount Certain
Straight Life Annuity
Life Income With Period Certain
Life Income With Amount Certain
Joint and Survivor
Period Certain
With this option, the insurer pays annuity income benefits for a specified period of time (e.g., 10
or 20 years). The stated period over which the insurer will make the benefit payments is called the
period certain. Even if the annuitant dies during this period, it will not affect the income benefit payments.
When the period certain ends, so do the payments.
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Amount Certain
With an amount certain option, the insurer pays a fixed benefit amount for as long as the accumulated
value of the annuity lasts.
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Straight Life Annuity
A straight life annuity provides benefit payments for the lifetime of the annuitant. It continues to
pay as long as the annuitant is alive, even if the accumulated value of the annuity has been depleted.
However, once the annuitant dies, the benefit payments end, even if all of the money in the annuity account
has not been paid out. This payout option is sometimes selected by those who need a maximum amount of income and
have no dependents.
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Life Income With Period Certain
A life income with period certain option guarantees that annuity benefits will be paid throughout the
annuitant's lifetime. It also guarantees that payments will continue to the beneficiary if the annuitant
dies before the end of a pre-set period, usually 5, 10, 15, or 20 years.
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Life Income With Amount Certain
This option provides for monthly income payments to be made throughout the life of the annuitant and
continues to the beneficiary until the total payments equal the amount paid for the annuity.
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Joint and Survivor
This option provides for fixed monthly income payments to be made throughout the lifetime of two (or more)
persons. The payments continue until both (or all) of the individuals die. In some plan variations, the payment
amount is decreased after the first death. A period certain may also be available with this option.
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