 Settlement Option
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Settlement Option
The type of guarantee payment selected when converting a deferred annuity into a guaranteed payout annuity. This is referred to as annuitization.
Common settlement options include:
- Period certain payments
Regular guaranteed payments over a specified number of years. Once the period is over, no money is distributed. If the annuitant dies before the end of the period, the payments will continue to the beneficiary for the balance of the time period remaining.
- Life income (one life)
Guaranteed payments for as long as the annuitant lives, no matter how long. At the death of the annuitant, no additional money is paid.
- Life income - period certain
A guaranteed amount for the life of the annuitant no matter how long that person lives. However, the payments will continue for a minimum amount of time, 5, 10, 15, or 20 years.
- Payments for a specified amount
Payments of the fixed amount specified until the proceeds, (with interest applied to the unpaid balance) are exhausted.
- Joint and survivor life income
A guaranteed amount during the joint lifetime of two persons. The payment will not stop until both persons have died. This option can also be combined with a certain period.
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