What is a contingent annuity?

This is practiced because the annuity is expected to pay out for a longer period than an annuity that terminates when the annuitant passes away. It is a means of stretching out the funds further in time. Once payments start on an annuity, a contingent annuitant may not be changed.

What affects a joint-and-survivor annuity's payment amount?

A joint-and-survivor annuity’s payment amount is also influenced by the benefit election for the contingent annuitant. Usually, this ranges from 50% to 100% of the payout made to the primary annuitant. The higher the benefit election, the lower the payment made to the primary annuitant. Let’s clarify all of this with an example.

What happens if annuity has a contingent annuitant?

When an annuity has a contingent annuitant, the annuity does not stop making payments until both the annuitant and the contingent annuitant have passed away. If the policy does not allow for a contingent annuitant, the annuity stops making payments when the annuitant dies.