What kind of payments does a life annuity with a period certain guarantee?

A life annuity with a period certain provides payments for a guaranteed period, regardless of whether the annuitant is alive during that time. This means that the annuity will make payments for a predetermined duration, such as 10 or 20 years, and if the annuitant dies before this period ends, the payments will continue to a beneficiary until the end of the guaranteed period.

This structure is particularly beneficial because it ensures that the invested funds generate returns over the guaranteed term, offering some level of financial security to the annuitant's beneficiaries. Additionally, it combines the features of a traditional life annuity—with payments for the life of the annuitant—with a safety net that guarantees a minimum payout.

Other payment structures, such as those that provide payments only for the life of the annuitant, do not guarantee a minimum payout if the annuitant dies early. Payments based on the annuitant’s age would typically be variable and not guarantee a set period, while decreasing payments would undermine the fundamental security intended by a period certain arrangement. Thus, the choice that correctly identifies the nature of payments guaranteed by a life annuity with a period certain is that they are guaranteed for a specified period, regardless of death.