Answer a: False. If Francis selects a 100% joint and last survivor annuity, his monthly income from the annuity will be lower than if he selects 50%.

Answer b: Correct answer. The joint and last survivor life annuity pays the annuitant (Francis) income for his lifetime and the selected percentage to the surviving spouse (50%). The percentage paid to the last survivor decreases the amount received by the annuitant.

Answer c: False. Although the 50% joint and last survivor annuity provides Francis with a greater monthly income than the 100% joint and last survivor annuity, the guarantee period (20 years) decreases the annuitant's monthly income. In addition, the 20-year guarantee would be for his children, and Francis does not want to leave any inheritance from this annuity.

Answer d: False. The 100% joint and last survivor annuity and the 20-year guarantee period would decrease Francis' monthly income. In addition, the guarantee period would be for his children, and Francis does not want to leave any inheritance from this annuity.

References

Preparation manual: Segregated funds and annuities, 3^rdedition, 2016, section 3.2.3.2.

Evaluated competency sub-component in Curriculum: 2.3 Analyze the types of annuities that meet the client’s needs

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