Written by : Knowledge Centre Team
2025-12-04
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6 minutes read
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Time and tide wait for no (wo)man! Ageing is a natural chapter of life, and there will come a time when you step away from work. It may be due to your own choice, changes in workplace expectations or personal well-being. It is not an end, but rather the beginning of a slower, more reflective pace where you focus on what truly matters.
This brings us to an important question. Will your savings be enough to support you for an uncertain number of years? Well, preparing for these ‘what ifs’ is not about fear. It is about creating comfort. Moreover, when choosing between retirement plans, such as a single or joint annuity, it becomes crucial. While the former ensures regular income for as long as you live, the latter goes a step further.
By understanding the differences between the two plans, let's prepare for your future and that of your loved ones, too.
Key Takeaways
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What is Annuity Assurance?
Senior citizens should enjoy old age rather than endure it. This is where annuities step in. An annuity is a type of insurance that promises you, lifetime income after retirement. When you first start earning, your immediate priority becomes raising a family and improving your standard of living. But at the same time, if you set aside some portion of your income to build your retirement kitty, you will have a corpus that will allow you to lead an equally good lifestyle post-retirement.
Annuities are useful because the insurance company uses your retirement corpus to provide returns at pre-defined intervals.
What are the Types of Annuities?
There are different types of annuity options available and some of the prominent ones are listed below:
- Life Annuity: Annuities are paid in the opted frequency (monthly/quarterly/yearly) until your demise.
- Life annuity with return of purchase price: You will get annuity payouts in the opted frequency (monthly/quarterly/yearly) until your demise. After your demise, the corpus used to purchase the annuity is paid to your nominee.
- Annuity payable for a guaranteed period: The annuity is paid for the guaranteed period, even after your demise. Annuity stops either on your demise or on completion of the guaranteed period, whichever is later.
- Joint life annuity: Annuities are paid until either you or your spouse is alive.
- Joint life annuity with return of purchase price: These annuities are paid until you or your spouse is alive. After the demise of both, the nominee will get the amount initially invested.
When is Single Life Annuity Better?
A single-life annuity pays only until your demise or until the end of the guaranteed period, whichever is earlier. It is suitable only if you do not have any financially dependent family members or if your spouse has their own annuity/pension plan in place.
Learn how will a savings plan help a non-working spouse.
A few of the conditions when it might be ok for you to consider a single-life annuity plan are:
- Your spouse has a separate annuity plan
- Your spouse is older than you
- You already have an adequate joint-life annuity together
- Your annuity plan has a life cover until your demise
One of the key points to consider is whether your spouse can survive without getting any portion of your income. If no, then factoring in some portion of income for the spouse is advisable.
The only factor that will influence your choice is, ‘how financially independent is your spouse after retirement?’ If not, the first course of action should be to ensure that your spouse will have financial support even after your demise.
A joint-life annuity is one way to ensure that support.
How does a Joint Life Annuity Work?
In the case of a joint-life annuity, money is paid to you until your demise and to your spouse until his or her ultimate demise. This arrangement gives you peace of mind that your loved one is financially secure even when you are not around.
A joint-life annuity is useful if your spouse does not have their own annuity/pension plan or if the plan will not be sufficient to meet their financial needs.
Payments could be a little lower, but they do last longer. You can also decide the proportion of your payout to be paid to your spouse. Therefore, your spouse may receive 100%, 75% or, even 50% of what you were receiving as result. The higher the percentage your spouse is guaranteed, the lower the initial payments will be.
What is the Effect of Retirement Fund Size on Annuity Choice?
You can also note that the amount you have for your retirement corpus will have a say in your annuity choice.
For example, if you and your spouse need Rs. 50,000 per month (6 lakhs p.a.) as pension income post-retirement and have a retirement corpus of more than Rs. 2 crores, you can select ‘Joint Life Annuity with the return of Purchase Price’.
The interest from this corpus would be enough for you to withdraw Rs 6 lakhs a year (after 3% p.a. inflation) until the demise of the surviving spouse, without any effect on the original corpus.
However, if your corpus is lower than this, you should probably choose either the Joint Life annuity option or Life annuity with a return of purchase price. So, in case of the policyholder’s unfortunate passing, will either continue receiving the pension or have enough money to start a new one.
Have you Chosen Between a Single and a Joint Life Annuity?
There is no straightforward answer, and the decision depends on each person’s circumstances. It is certainly a tough decision to make, but the following pro tips could help:
- Is your spouse totally/partially dependent on you for financial support? If yes, a joint annuity suits you.
- Does your spouse work and/or have their own pension/annuity in place? Go for a single-life annuity then.
- Are you willing to compromise and take away lesser payouts so that your spouse gets cash flows when you are not around? Joint annuities pay less because the annuity has to be paid for a longer duration.
To lead a financially independent, stress-free life during your retirement period, annuity plans are one of the best safety nets for a regular income.
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Conclusion
Retirement planning revolves around choosing how to live well when income stops. Whether you opt for a single annuity for yourself or a joint plan to secure your spouse's future too, what matters most is making that choice with clarity.
At Canara HSBC Life Insurance, we offer flexible annuity solutions designed to support you and your loved ones through every phase of retirement. With our lifelong income options and plans that offer returns on your investments, you gain both financial confidence and emotional comfort.
Plan today for a tomorrow that feels safe, stable, and fulfilling.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
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