If an individual has an annuity that guarantees income for life and payments for 20 years to a beneficiary if the individual dies early, what type of annuity is this?

The correct answer is a life annuity with period certain, which combines features of both a life annuity and a fixed payment period. This type of annuity guarantees that the individual will receive income for their entire life, ensuring that they have financial support for as long as they live. Additionally, it includes a provision that guarantees payments to a beneficiary for a specified period—20 years in this case—if the individual passes away before that period is completed.

This structure provides added security for both the individual and their beneficiary, as it ensures that the total benefit paid out does not fall short of a set amount, even if the individual dies early.

In contrast, a standard life annuity does not guarantee payments beyond the life of the individual, so if the annuitant dies shortly after starting the payments, the total payout could be significantly lower than expected. A term annuity only provides payments for a fixed period without continuing benefits based on the individual's lifespan, and a joint life annuity is designed for two individuals, providing payments until both have passed away. These distinctions clarify why a life annuity with period certain is the most appropriate description for the scenario presented.