How Your Annuity Can Be Paid to You

Last updated: February 1, 2016

There Are 4 Basic Options:

1. Life only pays income for your lifetime and doesn’t make any payments to anyone after you die.

  • While this option usually pays the highest income, you risk the possibility of receiving less than your principal if you die prior to receiving payments totaling the amount you paid for the annuity.

2. Period certain pays income for a defined period of time, usually 10 or 20 years.

  • Should you die prior to expiration of the period certain, your beneficiary will receive the remaining payments.

3. Life with period certain pays income for as long as you live and guarantees to make payments for a defined number of years.


  • If you die during the period certain, your beneficiary will receive the remaining payments for the period certain.

  • If you die after the period certain has ended, your beneficiary will not receive any payments.

4. Joint and last survivor offers income guaranteed for the rest of your life and the life of another person, such as your spouse.

  • Joint and last survivor coverage is also known as "lifetime income for two," which guarantees that income payments will continue for the life of the primary owner and a second person.

    • The guarantee is made by the insurance company issuing the annuity.

Payout Options Can Usually Be Mixed And Matched to Provide an Ideal Income Plan for Your Needs

There are many other options which can be explained to you by a financial adviser or insurance agent. These options can usually be mixed and matched to provide an ideal income plan for your needs.

  • For example, you and your spouse retire at age 65 with 10 years left on your mortgage. You could choose the option to have income for two people with a 10-year guaranteed period, so that if you both die before the guarantee expires, the payments would continue until the end of the 10 year period to pay the mortgage for your heirs.
