Definition
Joint Life Annuity
A joint life annuity pays income while either of two annuitants (typically a couple) is alive, continuing to the survivor after the first death.
Bought to secure a couple's retirement, a joint life last survivor annuity continues paying as long as either spouse lives, often at the same or a reduced rate after the first death. The income only stops when both have passed away, with options to return the purchase price to heirs.
The payout rate is lower than a single-life annuity because the insurer expects to pay for longer across two lives. Joint life annuities are popular in India for ensuring a surviving spouse is not left without income, and pair well with the return-of-purchase-price option.
Related terms
- Immediate AnnuityAn immediate annuity is a pension product where the buyer pays a lump sum and starts receiving regular income almost immediately, typically from the next payout cycle.
- Return of Purchase PriceReturn of Purchase Price (ROP) is an annuity option where the original lump sum used to buy the annuity is returned to the nominee on the annuitant's death.
- Annuity CertainAn annuity certain pays a fixed income for a guaranteed number of years regardless of whether the annuitant survives the full period.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.