Arizona Life and Health Practice Exam

Which of the following is a characteristic of joint life with last survivor annuities?

1. Payout ceases upon the first death

2. Payouts are based on a single annuitant's life

3. Income is guaranteed for the lifetime of the last survivor

4. Payable only in lump sum at annuitant's discretion

The correct answer is: Income is guaranteed for the lifetime of the last survivor

Joint life with last survivor annuities are designed to provide income for two individuals, typically a couple, and these annuities continue to make payouts until the death of the last survivor. The key characteristic that defines this type of annuity is that income is guaranteed for the lifetime of the last survivor. This means that no matter how long one or both of the annuitants live, the annuity will persist, ensuring financial support until both individuals have passed away. This feature makes it a suitable option for couples who wish to ensure that surviving partners have a continuous stream of income during their lifetime. In contrast, payouts ceasing upon the first death, being based on a single life, and lump-sum payments do not align with the fundamental principle of last survivor annuities. These options imply limited or conditional payouts that do not reflect the ongoing benefits guaranteed by joint life with last survivor arrangements.