Q.Example of contingent annuity is :

A contingent annuity's payments depend on an uncertain event; the endowment scholarship fund is the example.

Annuities are classified by the certainty of their term:

• An annuity certain has payments made for a fixed, known number of periods (e.g. loan installments, installment purchase of land).
• A contingent annuity has payments that begin or continue only on the happening of an uncertain event, so the number/timing of payments is not fixed in advance. …

A contingent annuity depends on an uncertain event; the scholarship endowment fund is such an example, so the answer is option (a).

Annuities are classified by when payments start and stop. In a contingent annuity, the payments continue until (or begin upon) the occurrence of an uncertain event rather than for a fixed, pre-known term.

• An endowment fund giving scholarships pays out depending on contingencies (students qualifying, the fund's conditions), so it is a contingent annuity. …