The tax rules will also be changed to allow joint life annuities
to be passed on to any beneficiary.
Single life annuities stop paying upon death of the policy holder, whereas joint life annuities
continue to be paid to a partner.
(Refund guarantees are offered with contracts covering a single life and joint life annuities
that terminate on the first death, but refund guarantees are not likely to be found with joint and survivor annuities.)
Those annuities whose payments cease upon the first death are called joint life annuities
. Currently, joint and survivor annuities are more common than joint life annuities
Poterba, "Joint Life Annuities
and Annuity Demand by Married Couples," Journal of Risk and Insurance, 67 (4) (December 2000), pp.
Kotlikoff and Spivak (1981) did not consider the demand for joint life annuities by married couples.
In spite of the importance of married individuals in the annuity-buying age range, joint life annuities currently represent a relatively small share of the SPIA market, although they account for a very large fraction of the annuities written in conjunction with defined benefit pension plans.
To explain further how joint life annuities allow a couple to provide for such state-contingent consumption, the authors now consider the two primary types of joint annuity contracts.
Joint life annuities play a potentially important role in completing the market for life-contingent claims.