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Simple English definitions for legal terms
joint annuity
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A quick definition of joint annuity:
A joint annuity is a type of payment plan where two people receive a fixed sum of money regularly, usually monthly or annually. The payments stop when one of the recipients dies. It is often used as a retirement income plan. There are different types of annuities, such as fixed annuity, variable annuity, and survivorship annuity. An annuity can be purchased from an insurance company or investment company.A more thorough explanation:
A joint annuity is a type of annuity that is payable to two annuitants until one of them dies, at which time the annuity terminates for the survivor (unless the annuity also provides for survivorship rights).
For example, John and Jane purchase a joint annuity. The annuity pays them both a fixed amount each month. When one of them dies, the annuity payments stop for the survivor. If John dies first, Jane will no longer receive payments from the annuity.
Joint annuities are often used by couples who want to ensure that the surviving spouse will continue to receive income after one of them dies.