Sunday, September 23, 2012

What is a Joint and Survivor Annuity?

When it comes to investing in an annuity plan, the purchaser looks for something that not only financially secures his life after retirement, but also ensures regular payment to his spouse after his death. And there the need of buying a Joint and Survivor annuity comes into play.

What is a Joint and Survivor Annuity?

A Joint and Survivor Annuity, also known as a Qualified Joint and Survivor Annuity, is typically bought by a married couple. It can be defined as an insurance tool that ensures to provide regular payment (usually monthly) until one of the spouses is alive. In other words, this is a special type of annuity which is especially designed for the married couples who want to assure that the surviving spouse would get payment for rest of his/her life.

How does a Joint and Survivor Annuity work?

The money paid in such an annuity plan is generally invested in a varied portfolio of financial apparatus and the income from such investments continues to be disbursed to the surviving annuitants.

Such annuity plans are sometimes referred as life annuity plans, as they ensure payment until either of the annuitants is living. And here a Joint and Survivor Annuity contrasts to other types of annuities. Most of the annuity plans pay out for a particular period of time agreed upon by the annuitant and the insurance company, irrespective of whether or not the annuitant is alive. That is why couples, who want to ensure the surviving spouse getting regular payments for his/her lifetime, opt for a Joint and Survivor Annuity.

What are different types of Joint and Survivor Annuity?

The most common and popular types of Joint and Survivor Annuity are a joint & one-half annuity, and a joint & two-thirds annuity.
1. Joint & one-half annuity – In this type of annuity, the payment is reduced to one-half of the actual payment followed by the passing away of one spouse.

2. Joint & two-thirds annuity – In this type of Joint and Survivor Annuity, the payment is reduced to two-third of the original amount after the first annuitant dies.

What is the rule regarding payment to surviving annuitant?

There is a specific rule regarding how much payment can be made to the surviving annuitant after the death of the first annuitant.
· After the death of first annuitant, the surviving annuitant would get no more than 100% and no less than 50% of the annuity amount paid during the purchaser’s life.

What is Qualified Optional Survivor Annuity?

Qualified Optional Survivor Annuity, also known as QOSA, is a provision for which the surviving annuitant may opt for after the death of first annuitant. According to this option, the amount payable to the surviving spouse will be equal to pre-set percentage of the actual annuity amount payable during the purchaser’s life.

These are just the fundamentals of Joint and Survivor Annuity. For more information and expert advice, one may need to talk to a qualified annuity agent.

Author’s BioJonny is a regular annuity and insurance blogger. He is a regular contributor to

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