Joint Life Annuity: Income That Lasts for Two Lifetimes (LLQP)
A joint life annuity is an annuity whose payments are based on two lives — usually spouses — and continue until the second death, so the survivor never loses the income stream.
This is also called a joint-and-last-survivor annuity. Because the insurer expects to pay for longer (someone in a couple usually outlives the averages), monthly payments are lower than for a single life annuity on the same capital.
Why it matters on the LLQP exam
The exam tests three moving parts:
- Continuation percentage — payments can continue to the survivor at 100%, or step down to, say, 75% or 60% after the first death. A lower continuation raises the initial payment.
- Reduction triggers — some contracts reduce on the first death (either spouse); others only reduce on a specified death (e.g. only if the primary annuitant dies first). Read the wording carefully — the exam does.
- Cost comparison — joint last survivor with 100% continuation and a guarantee period is the most expensive configuration: lowest income, maximum protection.
The classic scenario question gives you a couple where one spouse has no pension. The correct recommendation is usually the joint annuity, because a single life annuity on the pensioner's life would leave the survivor with nothing.
Joint annuities can also carry a guaranteed period, so if both annuitants die early, payments continue to a named beneficiary for the remainder of the term.
Example question
Which arrangement gives a surviving spouse the greatest ongoing income?
- Single life annuity with a 15-year guarantee
- Joint-and-last-survivor annuity continuing at 100%
- Joint annuity reducing to 60% on the first death
- Straight life annuity on the older spouse
Answer: B — full continuation to the second death means the survivor's income never drops.
Compare this with the life annuity basics and the deferred annuity, and see the whole module in the segregated funds hub.