Understanding annuities and especially a joint life annuity can be highly important the closer one comes to retirement or whenever one has a sum of money that one wishes to invest in order to gain a reliable income stream over a period of time, such as from when one retires and to when one passes away. A joint life annuity can be a good financial investment for many couples looking to ensure that either or both of them have an income they can generally rely on for some time.

The first thing to understand about an annuity – regardless of the type – is that it is usually sold by an insurance company and is a financial product sold by agents (usually independent agents) of an insurance company. It is an investment instrument structured to generally ensure a steady stream of income based on the purchase price of the annuity.

Additionally, something like a joint life annuity, besides ensuring steady income will also be structured so that it returns either a fixed rate of income or a variable rate of income, depending on the type of annuity. Also, it can last for a predetermined period of time, such as 10 years, or – in the case of an annuitized instrument, it can last from the time it's purchased until the time the person who is named in the annuity passes away.

A joint life annuity, in its most basic form, is an annuity issued to two individuals. Payments from the annuity will continue in whole or in part until both of those individuals pass away. It is also sometimes known as a “joint and survivor annuity.” This sort of annuity is often seen taken out by a husband and wife until the death of the survivor. For example, a husband and wife take out the annuity, a husband passes away 15 years later and the wife 10 years after that. Payments will continue until the wife has passed away.

These types of annuities are more often taken out as a retirement instrument in order to guarantee a reliable income stream during the “golden years” of the couple who has taken it out. It has to be funded or purchased by that couple, who often find those annuities by cashing in an IRA or left over 401(k) accounts in order to frontload the annuity with enough money to generate a good income, which is sometimes known as rate of return.

A joint life annuity can make a lot of financial sense for people intending to fund their retirement but not so much sense for those who have quite a few years left before retirement. In those cases, it can make a bit more sense to look at other forms of annuities, such as a straight life or even just a plain old fixed rate or variable rate annuity. The first thing to do, is to conduct a little Internet research on these various terms before picking out any particular insurance company or agent who is offering one of these financial products.