Annuity Certain

### What is the primary characteristic of an annuity certain? - [x] Payments continue for a specified period regardless of the annuitant's life status. - [ ] Payments vary based on stock market performance. - [ ] Payments cease upon the death of the annuitant. - [ ] Payments are only made to the annuitant and cease immediately after their death. > **Explanation:** An annuity certain ensures that payments continue for a fixed period even if the annuitant dies, providing additional security for their beneficiaries. ### Can an annuity certain's payment period be modified after purchasing the contract? - [ ] Yes, it can be changed anytime. - [ ] Yes, but only with additional premium payments. - [x] Generally, no; the specified term is fixed per the contract terms. - [ ] Yes, after five years of initial payments. > **Explanation:** An annuity certain typically has a fixed payment term defined at the start, and it is usually non-modifiable, providing predictability and stability. ### Who receives the remaining payments of an annuity certain if the annuitant dies before the payment period ends? - [x] The designated beneficiary or the annuitant’s estate - [ ] The insurance company - [ ] No one; payments stop immediately. - [ ] The government > **Explanation:** The designated beneficiary or the annuitant’s estate receives the remaining payments, ensuring that the agreed term's benefits are fully paid out. ### For what type of planning might an annuity certain be particularly useful? - [ ] Unpredictable expenses - [ ] Short-term savings - [x] Fixed-period income needs or inheritance planning - [ ] Gambling investments > **Explanation:** An annuity certain is particularly useful for planning fixed-period income needs or ensuring certain payments to beneficiaries upon the annuitant's death. ### What distinguishes an annuity certain from a lifetime annuity? - [x] Fixed payment period regardless of life status - [ ] Payments depend on market performance - [x] Payments cease upon death - [ ] Lower initial investment required > **Explanation:** Annuity certain guarantees payments for a specified term regardless of life status, unlike a lifetime annuity, which guarantees payments for the annuitant’s lifetime but ceases upon death. ### Can payouts from an annuity certain be given monthly? - [x] Yes - [ ] No - [ ] Only annually - [ ] Only biannually > **Explanation:** Payouts from an annuity certain can be structured as monthly, quarterly, or annual payments, providing flexibility in payment frequencies. ### What do you need to provide to start receiving payments from an annuity certain? - [ ] Bank’s approval - [ ] Mortgage statement - [x] Proof of annuity contract and meeting other policy conditions - [ ] Annual income report > **Explanation:** To initiate payments, proof of the annuity contract and meeting other policy conditions are required per the agreement terms. ### What main financial benefit does an annuity certain provide to the annuitant's beneficiaries? - [ ] Debt forgiveness - [x] Guaranteed payments for the remainder of the term - [ ] Stock options - [ ] Personal loans > **Explanation:** The primary financial benefit is guaranteed payments to the beneficiaries for the remaining term of the annuity, ensuring financial support. ### How does an annuity certain help in financial planning? - [x] It ensures a steady income stream for a fixed period. - [ ] It provides higher returns than the stock market. - [ ] It guarantees lifetime income after death. - [ ] It minimizes tax liabilities completely. > **Explanation:** An annuity certain helps in financial planning by ensuring a steady income stream for a predetermined period, aiding budget predictability. ### For whom is it advisable to get an annuity certain? - [ ] Individuals seeking maximum investment return - [ ] Gamblers - [x] Those needing guaranteed income for a set period or beneficiaries covered post-death - [ ] Young professionals in starting careers > **Explanation:** It is advisable for those desiring guaranteed income for a set period or to ensure their beneficiaries receive payments even after their death.