MENU
EDU Articles

Learn about investing, trading, retirement, banking, personal finance and more.

Ad is loading...
Help CenterFree ProductsPremium Products
IntroductionMarket AbbreviationsStock Market StatisticsThinking about Your Financial FutureSearch for AdvisorsFinancial CalculatorsFinancial MediaFederal Agencies and Programs
Investment PortfoliosModern Portfolio TheoriesInvestment StrategyPractical Portfolio Management InfoDiversificationRatingsActivities AbroadTrading Markets
Investment Terminology and InstrumentsBasicsInvestment TerminologyTradingBondsMutual FundsExchange Traded Funds (ETF)StocksAnnuities
Technical Analysis and TradingAnalysis BasicsTechnical IndicatorsTrading ModelsPatternsTrading OptionsTrading ForexTrading CommoditiesSpeculative Investments
Cryptocurrencies and BlockchainBlockchainBitcoinEthereumLitecoinRippleTaxes and Regulation
RetirementSocial Security BenefitsLong-Term Care InsuranceGeneral Retirement InfoHealth InsuranceMedicare and MedicaidLife InsuranceWills and Trusts
Retirement Accounts401(k) and 403(b) PlansIndividual Retirement Accounts (IRA)SEP and SIMPLE IRAsKeogh PlansMoney Purchase/Profit Sharing PlansSelf-Employed 401(k)s and 457sPension Plan RulesCash-Balance PlansThrift Savings Plans and 529 Plans and ESA
Personal FinancePersonal BankingPersonal DebtHome RelatedTax FormsSmall BusinessIncomeInvestmentsIRS Rules and PublicationsPersonal LifeMortgage
Corporate BasicsBasicsCorporate StructureCorporate FundamentalsCorporate DebtRisksEconomicsCorporate AccountingDividendsEarnings

What is the “Period Income” Option on Annuities?

The Period Income option or Guaranteed Period option on Annuities means that the entire balance, plus some interest, will be paid out to you in equal amounts over the course of a set number of years.

This option may fulfill a specific need for income in a certain time of life.

It used to be slightly more attractive to investors when interest rates were higher, but, today, the low interest rate environment does not give insurers enough time to generate interest for these sorts of payouts.

The distributions will look suspiciously like the amount that you put into it. This can serve a purpose as well, if you have a need to get a lump sum out of your hands for a specific number of years.

Annuity contracts are firm and in such cases, particularly when the income is deferred for a number of years (a “deferred period income annuity”), for all intents and purposes those assets do not belong to the annuitant for the time being, which can potentially serve as a shield against creditors, lawsuits, and liens.

It could also be used for deferred compensation arrangements such as salary continuation plans and other qualified or non-qualified arrangements at companies.

What is the “Life with Period Certain” Option?
Should I Hold an Annuity Within My IRA?

Ad is loading...