56. An annuity that guarantees a given number of income payments, whether or not the annuitant is alive to receive them, is referred to as
Answer: A
An annuity that guarantees a given number of income payments, whether or not the annuitant is alive to receive them, is referred to as a life annuity certain.
A life annuity certain provides guaranteed income payments for a specified period, regardless of the annuitant's survival. This means that beneficiaries will still receive payments even if the annuitant passes away before the end of the term.
A) a life annuity certain.
This option is correct because it explicitly describes an annuity that guarantees income payments for a fixed duration, ensuring that payments continue regardless of the annuitant's life status. This characteristic is the defining feature of a life annuity certain.
B) an assured life annuity.
This option is incorrect as it does not specifically refer to a guaranteed number of payments irrespective of the annuitant's survival. An assured life annuity typically implies payments during the annuitant's lifetime only, lacking the feature of guaranteed payments for a predetermined term.
C) a guaranteed survivor annuity.
This option is also incorrect because a guaranteed survivor annuity usually refers to provisions for a beneficiary to receive payments after the annuitant's death. It does not focus on the guaranteed number of payments during a set term while the annuitant may be alive or deceased.
D) an irrevocable endowed annuity.
This option is incorrect as it refers to a type of annuity that cannot be changed or canceled, and it does not necessarily guarantee payments for a specific term regardless of the annuitant's status. An endowed annuity focuses more on the accumulation of funds rather than the assurance of periodic payments.
Conclusion
The correct answer, a life annuity certain, clearly outlines the guarantee of income payments for a specified period, regardless of the annuitant's life. All other options fail to accurately describe this feature, either by focusing on lifetime payments only or misrepresenting the conditions under which payments are made. Thus, the life annuity certain is the definitive choice for this question.