Surviving spouse annuity

On an insured's death, group protection can compensate the family in two ways: a lump sum paid once, or annuities paid over time. The surviving spouse annuity belongs to the second. It is paid to the spouse, and often to the civil partner or cohabitant depending on the policy definition, in one of two forms. The temporary annuity is paid until the age at which the spouse can draw his or her own pension and the survivor's pension from the mandatory schemes; it bridges the gap. The lifetime annuity is paid until the spouse's death. It is found mainly in group protection, where industry-wide agreements sometimes require it, alongside the education annuity paid to children. For the insurer, it is reserved as an annuity: on the insured's death, it sets up a mathematical reserve equal to the present value of future payments, calculated on the spouse's mortality table and the technical rate. The benefit differs from the survivor's pension of the basic and supplementary pension schemes, which is a retirement benefit subject to age and sometimes income conditions. Its value lies in protecting against a poorly calibrated precautionary spend: a single lump sum can be used up too quickly.