Which option pays for life and guarantees payments to a beneficiary if death occurs before a specified period?

• A. Life annuity with period certain
• B. Joint Life with Last Survivor Annuity
• C. Refund Annuity
• D. Mortality Guarantee

Answer: (A)

It tests the feature of an annuity that pays for life but guarantees payments to a beneficiary if death occurs before a set period. A life annuity with period certain provides payments for as long as the annuitant lives, and if death happens before the end of the chosen period, the payments continue to a named beneficiary for the remainder of that period. If the annuitant lives through the entire period, payments end at the period’s conclusion, just like a standard life annuity. Other options either extend payments until a later death without a fixed period for a beneficiary, or are designed to return funds rather than guarantee ongoing payments to a beneficiary. Therefore, this option best fits the description.