Term Certain Annuity

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Term Certain Annuity

An annuity that makes payments (either monthly or in a lump sum) to the annuitant only for a certain period of time. A term certain annuity guarantees these payments for the term but ceases payments if the annuitant is still alive when the policy expires. While these may be a useful part of a larger retirement plan, term certain annuities could leave the annuitant with no income at all if they form the entirety of one's retirement. See also: Life Annuity.
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We have already seen the impact that terminal annuities are having on the corporate defined benefit market, specifically in the General Motors and Verizon transactions of 2012.
Yawitz, himself a pioneer of immunization a generation ago, acknowledges that some corporate plans will take the logical step beyond LDI and buy terminal annuities.

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