John, a 60-year-old recent divorcee, received a $500,000 lump sum from his pension. He wants to purchase an annuity to provide a steady income for his remaining life, with payments continuing for his chosen beneficiary for a minimum of 10 years should he die within that period. Which type of annuity would best suit his needs?

Question: John, a 60-year-old recent divorcee, received a $500,000 lump sum from his pension. He wants to purchase an annuity to provide a steady income for his remaining life, with payments continuing for his chosen beneficiary for a minimum of 10 years should he die within that period. Which type of annuity would best suit his needs?

Answer options: ✅ "A Life Annuity with a 10-year Guarantee Period"

• "A Term-Certain Annuity for 10 years"
• "A Joint-and-Survivor Life Annuity"
• "A Variable Annuity with a death benefit rider"

Correct answer: "A Life Annuity with a 10-year Guarantee Period"

Explanation: A Life Annuity with a Guarantee Period provides income for the annuitant's life, and if the annuitant dies before the end of the guarantee period (e.g., 10 years), payments continue to a named beneficiary for the remainder of that period. This perfectly matches John's desire for lifetime income with a minimum payout duration for his beneficiary.