Annuity Query

Bedlam

Registered User
Messages
275
Hi

What is the position where a Joint Life Annuity is in place and the Spouse Pre Deceases the Annuitant, can the Annuity revert to a Single Life Annuity?

Bedlam
 
No. The possibility of the spouse long outliving the purchaser was priced in to the contract. Just because a risk event does not come to pass does not mean that there was no cost incurred by the insurer.

(The same logic applies to a bank guarantee scheme. It costs even if none of the banks has to draw down funds from the guarantor. Brian Lenihan's attempt to characterize the bank guarantee as being without cost to the taxpayer when he brought it in used the same dodgy thinking. My real fear at the time was that he believed himself.)
 
Back
Top