Survivorship Annuity
What Does Survivorship Annuity Mean?
A survivorship annuity is a combination of life insurance and an annuity that provides a lifetime income to the surviving beneficiary. The policyholder pays regular premiums, and upon their death, the survivor receives a monthly income for life, rather than a lump sum death benefit.
It is also referred to as a reversionary annuity.
Insuranceopedia Explains Survivorship Annuity
If the beneficiary dies before the policyholder, the contract becomes void, and no benefits are paid. Additionally, because the premium is based on the life expectancy of both the policyholder and the beneficiary, the beneficiary cannot be changed. As a result, the premiums are typically similar to those of term life policies rather than permanent ones. This makes a survivorship annuity a more affordable option for older individuals.
