Utah Life Producer Practice Exam

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What is the primary benefit of purchasing a joint and survivor annuity?

It provides a higher payout for the primary annuitant only
It guarantees income for both partners' lifetimes
It allows for tax-free withdrawals
It provides guaranteed investment returns

The correct answer is: It guarantees income for both partners' lifetimes

The primary benefit of purchasing a joint and survivor annuity is that it guarantees income for both partners' lifetimes. This type of annuity is designed to provide a steady stream of income to both individuals, regardless of how long either partner lives. Upon the death of one partner, the survivor continues to receive payments, ensuring financial security for both parties throughout their lives. This feature is particularly valuable for couples who want to ensure that neither partner will face a financial burden after the other passes away. The joint and survivor structure protects against the risk of outliving one's resources, making it a strategic choice for long-term financial planning in a partnership. In contrast, options that suggest a higher payout solely for the primary annuitant or features such as tax-free withdrawals and guaranteed investment returns do not accurately reflect the core purpose of a joint and survivor annuity. The focus is on the provision of ongoing income for both partners, emphasizing the joint nature of the financial benefit.