Question #7 - Insurance/Annuity

Muriel (aged 65) and Arma (aged 67) are married and recently retired. They want to purchase an annuity with non-registered money. Which of the following annuities would provide the highest annual payout?

  1. A single annuity in Muriel’s name
  2. A single annuity in Arma’s name
  3. A joint first-to-die annuity
  4. A joint last-to-die annuity

Solution: as a joint first-to-die annuity would stop paying out when either Muriel or Arma pass away, this would be the annuity with the highest annual payout. It is expected to have the shortest lifespan. The lowest would be the joint last-to-die annuity as it requires the death of both Muriel and Arma in order to stop paying out. The correct answer is c.