Also called a C&C annuity, the certain and continuous annuity is a type of annuity investment that guarantees a certain number of payments that are paid out even if the annuitant passes away. In the case of the annuitant’s death the payments go to a specific beneficiary, continuing to pay out until the guarantee period is complete. As an additional benefit, if the annuitant lives beyond the designated number of determined payments, they would continue to receive their income for the rest of their lives.
This type of annuity is a good investment tool for those who need to guarantee a specific level of income through retirement. Even if they outlive the payment term they will continue to receive their income. If they pass away prematurely, their beneficiary, usually a spouse, would continue to enjoy the agreed upon income. However, after that period passes, the payments to the beneficiary would cease.
The classic example offered involves an annuity with a 10 year guarantee period. The annuitant would receive their payments even if they lived beyond the 10 year period, and there would be no payments made to the beneficiary. If said annuitant passed away 3 years into the guarantee period their beneficiary would receive the same monthly payments for the next 7 years, but those payments would end at the end of the 10 years.
The beneficiary of such a policy is most commonly a spouse. In order to ensure that both spouses continue to have income for the length of their lives it would be best to set up a C&C annuity for each one individually.