Which annuity type guarantees a fixed number of payments regardless of survival?

• A. Life annuity certain
• B. Life annuity
• C. Joint life annuity
• D. Deferred annuity

Answer: (A)

A life annuity certain guarantees a fixed number of payments regardless of how long the beneficiary lives. It combines a regular payment stream with a guaranteed term, so the payments will be made for a specified number of periods whether the payer is alive for the entire term or dies early and the payments must be continued to a beneficiary for the remainder of that term. For example, with a 20-year guarantee, there will be 240 payments total; if the annuitant dies after 5 years, the remaining 15 years of payments still occur to the beneficiary. This contrasts with a plain life annuity, which ends at death, a joint life annuity which lasts as long as both lives, and a deferred annuity which starts payments later.