What describes an annuity certain?

An annuity certain is specifically designed to provide income payments for a predetermined, fixed period of time. This means that irrespective of whether the annuitant is alive or deceased, the payments will continue for the entire duration specified in the contract. This fixed period could be set for any number of years, and the payments are made at regular intervals, making it a reliable source of income during that timeframe.

The focus on fixed periods distinguishes it from other types of annuities, such as lifetime annuities, which provide income for the lifetime of the annuitant and cease upon their death. Additionally, variable payment amounts and adjustments based on age are features associated with different types of annuities, but they do not characterize an annuity certain, which is all about consistency and predictability in payment amounts over a defined period.