9. Which contract promises to pay the owner a guaranteed minimum income every year for as long as the individual lives
Answer: A
A life annuity.
A life annuity is a financial product that guarantees the owner a minimum income for life, providing payments for as long as the individual is alive.
A) A life annuity.
This option is correct because a life annuity specifically promises to pay the owner a guaranteed income for their entire lifetime. It is designed to provide financial security in retirement, ensuring that the individual receives regular payments until death.
B) An annuity certain.
An annuity certain offers payments for a specified period, regardless of whether the individual lives or dies, which means it does not guarantee payments for life. Therefore, this option does not fulfill the requirement of providing income for as long as the individual lives.
C) A whole life policy.
A whole life policy is a type of life insurance that provides a death benefit to beneficiaries and may accumulate cash value, but it does not guarantee a minimum income for the policyholder during their lifetime. Thus, it does not meet the criteria set by the question.
D) A survivorship policy.
A survivorship policy is typically a type of life insurance that pays out upon the death of the second insured individual, and it does not provide guaranteed income to the owner. This option is irrelevant to the question of guaranteed lifetime income.
Conclusion
In summary, a life annuity is the only option that directly guarantees a minimum income for the duration of the owner's life, making it the correct choice. All other options fail to provide the essential characteristic of lifetime income, thus confirming that they do not meet the requirement outlined in the question.