What is a Joint Life or Survivor Annuity?
When it comes to retirement annuities, many people often choose to consider the people that they care about and hope to ensure that they are looked after in the case of an unexpected death. One of the most popular ways to do this is by taking out a joint life or survivor annuity. This style of annuity is split between the annuity holder and their partner/beneficiary and it ensures that the annuity pays out from the time that it is taken out right up until the death of both the annuity holder and their partner.
When it comes to taking out a joint life annuity, the annuity holder will be eligible to select which percentage of his/her annuity will be paid to the spouse, this can be any amount between 0-100% but usually ranges around 50%-100% depending on the circumstances. The amount that is paid to their partner or beneficiary will obviously then have a direct impact on their annuity income up until that point..
What are the benefits of a Joint Life Annuity?
A joint life annuity is a popular choice with people who like to ensure that their partner is looked after financially in the event of their death. In this situation, many partners of people who have a single life annuity can be left facing financial hardship if their partners haven’t taken the correct precautions to ensure that there is a suitable source of income for their partner in this circumstance.
Joint life annuities can help to ensure that this doesn’t happen and that in the event of an unexpected death the partner is protected – this can help to give both the annuitant and the partner a peace of mind that if anything unexpected were to happen they would remain safe and protected from any potential problems.
What are some drawbacks involved?
Joint life annuities do have some drawbacks and in many situations the annuitant may not receive as much income as they would from a single life annuity – this is due to the fact that they are now sharing this income with a partner or beneficiary. In these circumstances they may also have to take into consideration the situation of their partner (health, age etc…) which could in turn also reduce their annuity income.