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Simple English definitions for legal terms
life-income period-certain annuity
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A quick definition of life-income period-certain annuity:
An annuity is a type of payment plan where someone agrees to pay a certain amount of money to another person on a regular basis. This can be monthly or yearly, and it usually stops when the person receiving the payments dies. There are different types of annuities, such as those that pay for a certain number of years even if the person dies, or those that pay to a surviving spouse after the original recipient dies. An annuity can also be used as a retirement savings account, where money is put in tax-free and then paid out during retirement.A more thorough explanation:
A life-income period-certain annuity is a type of annuity that guarantees a specified number of payments, even if the annuitant dies before the minimum amount has been paid. An annuity is an obligation to pay a stated sum, usually monthly or annually, to a stated recipient. These payments terminate upon the death of the designated beneficiary.
For example, suppose John purchases a life-income period-certain annuity that guarantees payments for 10 years. If John dies before the 10-year period is up, his beneficiary will continue to receive payments until the end of the 10-year period. This type of annuity provides a level of security for the annuitant and their beneficiaries.
Life-income period-certain annuities are often used as a retirement income source. They provide a guaranteed income stream for a specified period, which can help retirees plan their finances.