When either Daniel or Karen dies in a joint-and-survivor annuity, what happens?

In a joint-and-survivor annuity, when one of the annuitants (in this case, either Daniel or Karen) passes away, the surviving annuitant is entitled to continue receiving payments for life. This is a key feature of joint-and-survivor annuities, which are designed to provide ongoing income protection for the surviving partner after the death of one party.

The structure of these annuities is specifically intended to ensure that the surviving annuitant does not outlive their financial resources, thereby providing peace of mind in terms of planning for retirement and ensuring that living expenses can continue to be met. Additionally, payments typically reduce to a percentage of the original amount (commonly 50% or 100%) but will last for as long as the survivor lives, ensuring lifelong income continuity.

This characteristic differentiates joint-and-survivor annuities from other types of annuities, which may not offer the same level of security for the surviving spouse or partner. Hence, the surviving annuitant's right to receive payments for life is what makes this arrangement particularly valuable for couples planning their financial future together.