Single Life vs. Joint & Survivor Annuities: Understanding the Key Differences

When you are choosing to invest in an annuity, you can usually choose between a single-life annuity or a joint-and-survivor annuity. Here are the differences between the single-life annuity and the joint-and-survivor annuity. 

Single-Life Annuity

As the name implies, the single-life annuity covers just one life. This is the type of annuity that you would buy if you were single. Payments are going to last for the lifetime of one individual.

Joint-and-Survivor

With this type of annuity, the payments are going to last for two individual's lifetimes. This is the type of annuity that would be ideal for married couples. Even after one of the members of the couple dies, the other spouse is still going to be able to receive monthly payments until they die.

Considerations

Whenever you are trying to choose between these two types of annuities, you need to closely evaluate your options. With the single-life annuity, you are going to be able to receive larger monthly payments. This is because the predicted payout time is going to be less than if you have to worry about two individuals dying. You also need to realize that you will not be able to change the annuity structure after you have selected one.

Joint and Survivor Annuity

A joint and survivor annuity is a type of contract that can be entered into with an insurance company in order to provide retirement benefits for two individuals. Typically, this is a type of annuity that is purchased by married couples. With a joint and survivor annuity, the annuity payments will be received for the duration of the lives of both people in the contract. If one of the spouses pass away, the other one will still be able to continue receiving annuity payments for the remainder of his or her life. This annuity will have smaller payments than an annuity for a single person.