What are Single Life and Joint Life Annuities?

Single life annuities pay an income to the annuitant only and do not come with any death benefits. That means that when you pass away none of your income will be passed onto your partner or spouse. You can mitigate against this by choosing a guarantee period which will ensure your income will be passed onto your partner/spouse for a set number of years after the purchase date. As well as building in a guarantee period, you may also want to opt for a joint life annuity which will allow you to pass on some or all of your annuity income should you die before your partner/spouse. This can be anything from 50% to 100% of your starting income. The amount it costs you to purchase a joint-life annuity will depend on you and your partner’s age when you buy the annuity.  If your partner is considerably younger than you then you can expect a lower starting income.

Joint-life annuities can protect your partner/spouse financially should you die before them. If they have no other form of income in retirement then a joint-life annuity will ensure they continue to receive an income from your annuity. Your starting income will of course be lower compared with a single-life annuity.

Further Reading

Wikipedia - Life Annuity
Pension Choices
Pension Finder
ThisisMoney Report on Single Life Annuities

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