A single life annuity pays income for the lifetime of one annuitant only. When that person dies, payments stop – even if death occurs in the first year of the contract. Single life annuities produce the highest monthly income of any payout structure because the carrier is only insuring one life expectancy.
How Single Life Payments Are Calculated
The carrier prices the contract using mortality tables, the annuitant’s age, gender (in most states), and current interest rates. A 65-year-old man buying a $100,000 SPIA today might receive about $580/month for life. A 75-year-old would receive considerably more because the expected payout period is shorter; a 55-year-old would receive less.
Adding a Period Certain
Most carriers let you add a period certain to a single life payout – typically 5, 10, 15, or 20 years. If the annuitant dies before the certain period ends, the remaining payments go to a beneficiary. Adding a 10-year period certain to a single-life SPIA reduces the monthly payment by roughly 5-8%, but ensures heirs receive at least 10 years of income if the annuitant dies early.
Single Life vs Joint and Survivor
Use single life when the annuitant is the sole income-needer or when a spouse has separate guaranteed income. Use joint and survivor when both spouses need the income. The right choice depends on each spouse’s financial picture, not just total household income.
