What is a Joint and Survivor Annuity?
How Does a Joint and Survivor Annuity Work?
Joint and survivor annuities, as the name suggests, serve a dual purpose. In addition to paying income benefits to two individuals simultaneously, they also continue these payments to the survivor once one of the beneficiaries dies. When this occurs, the annuity's issuer reduces the income payments to a fraction of the joint amount (usually by one-half or one-third).
For example, suppose Bob and Jane receive $2,000 each month from a joint and survivor annuity. If Bob dies, Jane would continue receiving monthly income of roughly $630–$1,000.