Years Certain Annuity

Published: | Updated: July 1, 2016

Definition - What does Years Certain Annuity mean?

A years certain annuity is an insurance product that typically pays the policyholder a specific monthly income for a designated number of years, regardless of the number of years for which the policyholder lives. Therefore, if the policyholder dies during the time frame selected for the years certain annuity, the beneficiary named in the policy will continue to receive annuity payments until the expiration date.

Years certain annuity is also known as term certain annuity and period certain annuity.

Insuranceopedia explains Years Certain Annuity

Many people prefer purchasing a life annuity that provides payouts for the duration of the policyholder's life. However, the advantage of a years certain annuity is that it provides larger monthly payouts to the policyholder for a designated number of years. This annuity involves certain risks as well, such as the risk of the policyholder outliving the designated monthly payment period. This is why people will purchase a years certain annuity only once they know they'll have another source of income during their retirement years.

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