Jointlifelastsurvivorannuity

Key Takeaways

• A joint life with last survivor annuity provides lifelong income for couples, adjusting payments after one partner's death until both partners pass away.
• The annuity can offer payments to a designated beneficiary even after both partners' deaths, making it useful for estate planning.
• Payment amounts are specified in the contract and may offer 100%, 75%, 66.66%, or 50% of the original benefit after a partner's death.
• Many financial advisors recommend payment levels above 50% for the surviving spouse, although lower payments may result in higher death benefits.
• Consider this annuity to ensure financial security for couples and potential beneficiaries; explore suitable options in the best annuity products.

What Is a Joint Life With Last Survivor Annuity?

A joint life with last survivor annuity is an insurance product for couples that guarantees income for life, with payments continuing until both partners have passed away. It provides income security for the surviving partner, with some contracts allowing remaining value to go to a beneficiary or charity after the second death.

We cover how a joint life with last survivor annuity works, its benefits, and what to consider when choosing a payout option as part of retirement planning.

Understanding Joint Life With Last Survivor Annuities

A joint life with last survivor annuity is, by definition, not term certain. Payments continue until both partners in a marriage die. Typically, after one partner dies, the survivor receives a smaller payment. The exact amounts to be paid are specified in the contract.

It is also possible for an annuitant to designate a beneficiary, who may or may not be the same person as the designated third-party. That third-party would receive a payment that is triggered by the death of one of the spouses.

For example, a couple might have a joint life with last survivor annuity that pays a $2,000 monthly benefit. After one spouse dies, half of that $2,000 may be reallocated to a third-party beneficiary, such as a child, for the life of the remaining spouse.

As such, a joint life with last survivor annuity may be used as a component of estate planning.

Fast Fact

A joint life with last survivor annuity is sometimes called a joint and survivor annuity.

Is It Right for You?

A joint life with last survivor annuity is for married couples who want a surviving party to continue receiving benefits until the death of both individuals. Annuity buyers, in this case, will need to decide how much the surviving spouse will need financially.

Common options provide for payouts at 100% of the original benefit, 75%, 66.66%, or 50%. Since a surviving spouse's living costs tend to be higher than half the living costs of two people, many financial advisors and planners choose an income payment above 50%.

It should be noted that lower payments generally mean a higher death benefit. Of course, if there are other sources of income in retirement, a 50% payout may be adequate.

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