Which option pays until the first death among two or more annuitants and then stops?

Which option pays until the first death among two or more annuitants and then stops?

• A. Pure life annuity
• B. Multiple life annuity
• C. Joint and survivor arrangement
• D. Joint life annuity

Answer: (D)

The key idea here is how payments end when multiple lives are involved. A joint life annuity is set up to provide payments for two or more lives but the payments stop when the first of those lives dies. In other words, the contract is designed to continue only until the first death, after which there are no further payments unless another feature (like survivor benefits) is involved. This differs from a joint and survivor arrangement, where payments continue after the first death to the surviving annuitant (often at a reduced amount) until the last death. A pure life annuity is for a single person and ends at that person’s death, not after a second person dies. A multiple life annuity covers more than two lives, but the defining immediate stop at the first death points to the joint life annuity.

The key idea here is how payments end when multiple lives are involved. A joint life annuity is set up to provide payments for two or more lives but the payments stop when the first of those lives dies. In other words, the contract is designed to continue only until the first death, after which there are no further payments unless another feature (like survivor benefits) is involved.

This differs from a joint and survivor arrangement, where payments continue after the first death to the surviving annuitant (often at a reduced amount) until the last death. A pure life annuity is for a single person and ends at that person’s death, not after a second person dies. A multiple life annuity covers more than two lives, but the defining immediate stop at the first death points to the joint life annuity.