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Joint Life Annuities Explained

By Mark Gregory on the 19th February 2014

Annuities have become increasingly popular for those consumers who are looking to create a sense of security and stability during their retirement years. There are several different types of annuities, all of which come with a variety of different add-ons, manipulations, and variations. Choosing the right annuity can be a time and labor extensive process. However, through research, consumers are able to find just the right annuity to suit the future goals they have set for themselves and their families. There are even options for married couples as opposed to single consumers.

For married couples, a joint life annuity can be a viable option for retirement. In this specific type of annuity, both parties in the marriage are offered a certain level of financial security throughout their retirement years. A joint life annuity is opened by two people, most often a married couple, and it provides for both during retirement years. The annuity makes payments to the parties as long as just one of the partners is still alive. There are various ways that joint life annuities can be drafted so there are several different options for payment. Depending on the agreement between the investor and insurer, the amount of the payments may or may not decrease once the first spouse passes away. There are several case specific manipulations that can be performed with joint life annuities.

The payments for a joint life annuity are typically lower than that of a life-only option since the insurer pays out income until both spouses have passed away. In this instance, one spouse may outlive the other by a number of years. There are several pension plans that offer a variation of joint life payments, which may prove beneficial for different couples, depending on their needs. Because there are several variations to this particular kind of annuity, it is especially worth looking in to for most couples, as there may be some options that would work very well for particular needs.

Like any investment strategy, joint life annuities should be strategically researched before purchase. They work very well for some married couples as they offer a sense of security for both parties during retirement. However, there are several variations to joint life annuities and it would be important for the consumer to be aware of all potential positives and drawbacks to investing in a joint life annuity.

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