Reversible Annuity
Life annuity that continues to be paid to the surviving spouse after the death of the first annuitant.
Full definition
The reversible annuity is a form of life annuity that provides for the continuation of payments for the benefit of the surviving spouse after the death of the first beneficiary. It offers enhanced financial security for couples.
In a life annuity on two heads with a reversible annuity, the amount of the annuity may be maintained at 100% for the surviving spouse, or reduced (for example to 60% or 75%). This reduction offsets the increased risk for the buyer of paying the annuity for longer.
The reversible annuity is particularly recommended for couples where both spouses live in the property sold. It guarantees that the survivor can continue to live with dignity without a sudden loss of income. The calculation of the annuity then takes into account the age of the two annuitants and their respective life expectancy.
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Related terms
Life Annuity (the pension)
Sum paid periodically (monthly or quarterly) to the seller until their death, calculated according to the value of the property and life expectancy.
Annuitant (Seller)
The seller of the property under a life annuity, the person who receives the life annuity until their death.
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