Joint Annuity

Impact of health and lifestyle

Enhanced annuities, which offer increased income based on medical or lifestyle factors, may also be available when arranging a joint life annuity. These are based on the assumption of a reduced life expectancy, which can affect how long payments are likely to be made.

With joint life annuities, both the annuitant’s and the beneficiary’s circumstances may be considered:

• If the beneficiary qualifies for enhanced terms, this could improve the overall rate offered.
• If only the annuitant qualifies, the annuity rate may be reduced to reflect the potentially longer life expectancy of the beneficiary.

Each provider may approach this assessment differently, so it can be helpful to disclose health and lifestyle details for both parties when applying.

Reasons to consider a joint life annuity

A joint life annuity may be appropriate for those wishing to ensure a surviving spouse or dependent is not left without income. This can be particularly important when one partner has been financially dependent on the other’s pension income.

It may also benefit those supporting children or relatives with ongoing financial needs. By selecting the appropriate income continuation level, the product can be tailored to the specific needs of your household.

Points to keep in mind

While joint life annuities offer peace of mind, they often involve trade-offs. Opting for a higher continuation rate or adding inflation protection typically reduces the initial income level paid during the annuitant’s lifetime.

However, these features may be worth considering if long-term financial support for someone else is a priority.

Careful consideration of your financial circumstances, future needs, and preferences will help in determining the right balance between immediate income and ongoing protection.