Survivorship Annuity Policies

Such policies provide that if the beneficiary should outlive the insured she will receive an annuity during her lifetime, the policy, however, expiring and the premiums being forfeited in case the insured should outlive the beneficiary. As compared with the ordinary installment policy, this contract does not promise the payment of a definite number of installments. Instead, it agrees to pay an annuity to the beneficiary only during the years that she may survive the insured. Yet in doing this the policy overcomes the objection, noted in connection with the ordinary installment plan, that the beneficiary may survive the installment period and thus be without an income.

Although popular among persons familiar with the mathematics of life insurance, this policy has never appealed to the public, partly because nothing is realized in case the beneficiary should die before the insured, and partly because the amount paid to the beneficiary in case she should outlive the insured is indefinite and may be very small. The first objection, however, may be eliminated by having the policy provide for the return of all premiums paid in case the insured shall survive the beneficiary.