Period Certain Immediate Annuities

Immediate annuities that have a specified period are known as period certain annuities. A period certain immediate annuity pays a fixed monthly payment for a specific period of time (e.g. 60 months). After all payments have been made, they cease. If you die before all the payments are made, they will continue to your heirs. Conceptually, a period certain immediate annuity is like a loan you’ve made to someone who is paying you back principal and interest each month until your principal is completely repaid. For example, a 5-year period certain immediate annuity would pay you a monthly income for exactly 60 months. Once the payments start, you can’t stop or change them. If you died before all 60 payments were received, they would be sent to your heirs each month. After 60 months, your payments would cease.