Term Certain Annuity

An annuity involves paying a large amount of money now to receive periodic smaller payments down the line. Some annuity contracts are meant to guaranteed income throughout retirement. Like...until death.

You hand over a big bag of cash now, but the insurance company will send you monthly checks starting 20 years from now. These will last until you die...even if that deer-antler serum you've been injecting into your gums works, and you live to be 130 years old.

A term certain annuity is different. This form of annuity doesn't have the same potential longevity. The payments only come for a finite, pre-set amount of time. A term. You might get the monthly checks for 10 years...but with a term certain annuity, at the end of that 10-year span, the checks end. Nothing more is coming. Even if you live to 130.