Joint Life with Last Survivor Annuity

Written By
Paul Tracy
Updated August 5, 2020

What is a Joint Life with Last Survivor Annuity?

A joint life with last survivor annuity is an annuity that provides spouses with income until both spouses have died. The annuity also gives the holder the option to give a portion of the remaining income to a third-party beneficiary until the surviving spouse's death.

How Does a Joint Life with Last Survivor Annuity Work?

A married couple that holds a joint life with last survivor annuity receives a fixed amount of income each month until both spouses have died. This means that the surviving spouse continues to receive annuity payments even after the other has died. Additionally, the couple has the option to arrange for a beneficiary to receive payments following the death of one spouse. In pursuing this option, the monthly income payment is divided between the surviving spouse and the beneficiary. The beneficiary continues to receive payments until the death of the surviving spouse.

For example, suppose Bob and Jane hold a joint life with last survivor annuity that pays them $5,000 each month and have designated their daughter Kate as the third-party beneficiary. Bob and Jane have arranged for Kate to receive $1,000 once one of them dies. Following the death of either Bob or Jane, Kate begins receiving $1,000 each month, and the surviving spouse receives $4,000. Once the surviving spouse dies, Kate stops receiving the payments.

Why Does a Joint Life with Last Survivor Annuity Matter?

A joint life with last survivor annuity provides financial support to retired couples until the death of both spouses. Also, this type of annuity provides a convenient way to leave a financial legacy to a close relative or worthy cause.