Archive / Investment Adviser (Level 2) / Life Insurance Products
nism-series-xb-joint-life-survivor-annuity-100-percent-spouse-pension[ INVESTMENT ADVISER (LEVEL 2) ]
How does a 'Joint Life Survivor Annuity with 100% Pension to Surviving Spouse' function in retirement planning?
[ A ]Annuity payments terminate immediately upon the primary annuitant's death, leaving the spouse with ₹0.
[ B ]Payments double every 24 hours.
[ C ]Pays the full regular annuity amount throughout the primary annuitant's life, and upon their demise, continues to pay 100% of the exact same annuity amount to the surviving spouse for the remainder of their lifetime.[ CORRECT ]
[ D ]The spouse is sent to civil prison upon the primary annuitant's death.
Takeaway
The correct answer is C: a 100% Joint Life Survivor Annuity pays the full regular annuity to the primary annuitant for life, and on their death continues paying the exact same full amount to the surviving spouse for the rest of their life.
Derivation
This option is chosen by couples who want no reduction in household income after the first death -- typically where the surviving spouse has minimal independent income and full continuity is prioritized over a higher initial payout. Because the insurer must reserve for the possibility of paying the full annuity across two lifetimes (rather than one, or a reduced amount after the first death), the per-rupee pension rate for a 100% joint-life-survivor option is lower than for a single-life or 50%-reduction option at the same purchase price -- a trade-off the exam typically pairs with this feature.
Why the others fail
A — Annuity payments terminate immediately upon the primary annuitant's death, leaving the spouse with ₹0.
Directly contradicts the defined feature of joint life survivor annuities, which is continued payment to the surviving spouse, not termination.
B — Payments double every 24 hours.
Nonsensical; annuity payouts follow the fixed, contractually agreed schedule, they do not double on any periodic basis.
D — The spouse is sent to civil prison upon the primary annuitant's death.
Absurd and legally baseless; there is no consequence of imprisonment tied to annuity continuation upon the primary annuitant's death.
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