Annuity on the last survivor is a specialized financial product that guarantees a regular income for the duration of the lives of two or more individuals, with payments made to the last surviving member. This type of annuity is commonly used in retirement planning, particularly for couples or individuals with dependents, as it ensures continued financial security even after the death of one or more parties.
The annuity on the last survivor is typically structured as a contract, where an individual or couple makes regular payments or a lump sum to an insurance company or financial institution. In return, the insurer promises to provide a fixed or variable income stream for as long as the annuitants are alive. Unlike other types of annuities, this particular arrangement extends the income provision exclusively to the surviving member, ensuring their financial well-being for as long as they live.
The benefits of an annuity on the last survivor are multi-fold. Firstly, it offers peace of mind for individuals concerned about outliving their financial resources or the well-being of their dependents. Secondly, it provides a hedge against longevity risk, as the annuity continues to pay out to the surviving member even if their partner or other annuitants pass away. Additionally, because the insurer calculates the income based on the life expectancy of two or more individuals, the payments tend to be larger compared to single-life annuities.
In summary, an annuity on the last survivor is a financial product that guarantees a regular income to the last surviving member of a group. It offers financial security, longevity protection, and larger payments compared to single-life annuities, making it a popular choice for retirement planning and ensuring the well-being of dependents.
