CARD T158
Life-Only Annuity
A payout option continuing for the measured person’s lifetime and ending at death. It has no guaranteed remaining payment period.
How it works
Life-only income continues while the measured annuitant lives and stops at death. There is no guaranteed minimum payment period or refund built into the plain option. For otherwise comparable terms, it generally provides a higher starting payment than an option adding survivor or minimum-period protection. It protects against longevity risk but leaves no remaining income guarantee if death occurs early. [1] [2]
An annuitant receives two monthly payments and then dies. Under a plain life-only option, payments stop even though total payments were less than the premium.
Lifetime income guarantees duration while alive, not recovery of every premium dollar.
CARD T159
Life with Period Certain
Lifetime payments with a minimum guaranteed payment period. If death occurs early, payments continue to the beneficiary for the period’s remainder.
How it works
Life with period certain pays while the annuitant lives and guarantees payments for at least the specified period. If death occurs during that period, the remaining guaranteed payments go to the designated recipient under the contract. If the annuitant outlives the period, lifetime payments continue, but the minimum-period guarantee has already been satisfied. [1] [2]
With life and ten years certain, death after four years leaves six years of guaranteed payments. Survival past ten years does not end lifetime income.
The certain period is a minimum guarantee, not the maximum lifespan of income.
CARD T160
Joint-and-Survivor Annuity
Payments based on two lives that continue while either survives. The amount after the first death depends on the option chosen.
How it works
Joint-and-survivor income is measured on two lives and continues while either survives. The survivor may receive 100%, two-thirds, 50%, or another specified portion, depending on the election. A joint-life option ending at the first death is different. Adding survivor protection generally reduces comparable starting income relative to a single life-only option. [1] [2]
A $2,000 monthly payment with a 50% survivor continuation becomes $1,000 after the applicable first death under the stated option.
Joint-and-survivor does not always mean the same payment continues unchanged.
CARD T161
Refund Life Annuity
Lifetime income with a provision returning a defined unpaid balance after death. The refund may be paid in cash or installments.
How it works
A refund life annuity combines lifetime income with protection for a defined unpaid balance if the annuitant dies early. A cash refund pays that balance at once; an installment refund continues payments until it is paid. The contract defines the amount protected and calculation. A refund guarantee generally reduces starting income compared with otherwise equivalent life-only income. [1] [2]
If a contract guarantees return of a $100,000 purchase amount and counts $30,000 of payments against it, its simplified remaining refund is $70,000.
Refund protection concerns a defined balance, not unlimited payments to a beneficiary.
APPLY THE TERMS
Practice questions
Select an answer, then check it to see why each option is right or wrong.
T158 · Life-Only Annuity
0 of 3 answered
T159 · Life with Period Certain
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T160 · Joint-and-Survivor Annuity
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T161 · Refund Life Annuity
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Sources & further reading
Original explanations and practice scenarios informed by the following regulatory, legal, and product resources. State examples are not presented as nationwide deadlines or requirements.