The Number Of Lives Covered By Annuities

Although the usual annuity contract covers only one life, it is sometimes advantageous to cover more than one life under a single contract. The most popular type of multiple-life annuity is the joint-and-last-survivorship annuity. Under this contract, payments are continued throughout the joint lifetimes of two or more annuitants until the death of the last survivor. The contract can provide the same monthly income throughout this period or may provide for a reduction in income payments upon the death of the first annuitant. Thus, income can be assured to a retired couple over their combined lifetimes. The less common form of life annuity is the joint-life annuity, under which payments cease upon the death of the first annuitant. This type of annuity is normally used when there exists an independent income sufficient to support only one member of the family.