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?
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