Annuities✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
In a joint and survivor annuity, the provision that "payments reduce to two-thirds after the first death" means that:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A joint and survivor annuity pays income over two lives and continues for the surviving annuitant. The reduction feature specifies what percentage of the original benefit the survivor receives after the first death, commonly 100 percent, two-thirds, or 50 percent. A two-thirds option pays the survivor two-thirds of the amount the couple received while both were alive. Higher survivor percentages produce lower initial payments because the insurer expects to pay for a longer period.
Why the other options are wrong
- B) The reduction applies to the survivor's payment after the first death, not to the first annuitant's initial benefit.
- C) Two-thirds refers to the percentage of the payment amount continued, not a fraction of the payment term.
- D) Joint and survivor options make periodic lifetime payments; they do not pay out a lump-sum account value.
Memory hook
Joint and survivor: 100/66/50 = how much the last one standing keeps. Higher survivor payout means a lower starting check.