Temporary Life Annuity

What Does Temporary Life Annuity Mean?

A temporary life annuity provides regular payments to the annuitant either until a predetermined expiration date is reached or until the annuitant passes away, whichever comes first.

Insuranceopedia Explains Temporary Life Annuity

Most annuity contracts either have a fixed expiration date or provide payments for life. A temporary life annuity, however, combines both features, typically resulting in fewer payments compared to a standard annuity. Consequently, it usually costs less.

That said, the annuitant must ensure they have a source of income after the temporary life annuity ends. This type of annuity is ideal for someone who retires early and needs supplemental income until they become eligible to collect benefits like Social Security.