A contract that guarantees monthly income to the owner is known as what type of annuity?

The type of annuity that guarantees monthly income to the owner, particularly in the context of having set contributions that may vary, is known as a flexible premium annuity. This allows the owner to make multiple contributions at varying amounts, which can grow over time and subsequently be converted into income.

A flexible premium annuity provides the advantage of adaptability to the owner's financial situation, meaning they can adjust their premium payments as needed. This flexibility can be beneficial for those who may want to increase their investments during better financial periods or decrease them during tougher times. Ultimately, when the owner decides to receive income, the accumulated value of these payments can be transformed into a guaranteed series of monthly payments.

The other types listed, like the immediate annuity, refer to systems where payments begin shortly after the initial premium is paid, without the option for varying contributions. Deferred annuities delay the income phase until a later date but are also based on more stable, preset payments, compared to the flexibility of the premiums in this particular context. Thus, a flexible premium annuity aptly describes the situation where the owner has the option for varied contributions leading to guaranteed income.