Massachusetts Life Producer Practice Exam

What type of annuity should a retired couple choose to maximize their income until both pass away?

1. Single life annuity

2. Joint and survivor annuity

3. Immediate annuity

4. Variable annuity

The correct answer is: Joint and survivor annuity

Choosing a joint and survivor annuity is a strategic decision for a retired couple who wants to ensure that both partners receive income for the duration of their lives. This type of annuity guarantees that as long as one spouse is alive, they will continue to receive payments. When the first spouse passes away, the surviving spouse still receives an income, which can be set at the same amount or at a reduced percentage, depending on the specific terms of the annuity. This structure is particularly beneficial for couples who want to avoid the risk of outliving their income. It also provides peace of mind, knowing that the surviving partner will have continued financial support. When compared to options like a single life annuity, which only pays out until one individual passes away, the joint and survivor annuity clearly aligns with the goal of maximizing income for both individuals throughout their lifetimes. Other options like immediate annuities can offer fast payment start times, and variable annuities allow for investment growth potential but do not specifically address the need for lifetime income protection for both partners. Therefore, the joint and survivor annuity stands out as the most suitable option for maximizing income for a couple until both pass away.