Joint-life payouts are designed to provide life-long security for the surviving partner. Whether your partner is the primary beneficiary or the contingent beneficiary, this kind of payout ensures that your retirement savings will help support both of you in the event of death.

When opting for a joint-life payout, the account holder usually designates a portion of their pension plan as a joint-life benefit. This amount is subtracted from the primary/original account holder's death benefit, resulting in a smaller amount of income going to their beneficiaries. The portion designated for joint-life payout is then paid out to the surviving spouse or partner, on a regular basis, for their lifetime.

A joint-life payout can often come in the form of an annuity, which pays the same amount each month. This is generally considered the most secure form of payoff, as it guarantees a dependable, consistent income for the beneficiary, regardless of stock market fluctuations or employment changes.

When the primary beneficiary passes away, the individual designated as joint-life beneficiary then owns the account and can, upon their death, name a new beneficiary. This provides a level of security that single-life payouts can’t. Plus, the remaining balance of the pension plan is ultimately passed down to the beneficiaries with a joint-life payout.

This type of payout is especially beneficial if the surviving spouse or partner is of a lower age than the primary account holder, because it allows them to benefit from the pension payments for a longer period of time. This structure also ensures that the surviving spouse will not outlive their income, which is a key factor in maintaining financial security in retirement.

There are some drawbacks to joint-life payouts, however. Because the surviving spouse or partner has complete control over the account, if their circumstances changes such as divorce or remarriage, the account may be impacted.Another drawback is that the account will be reduced by the payments made to the surviving spouse or partner; however, if the primary account holder is able to save enough during their lifetime and the amount of their pension is high, this may not be a major concern.

Overall, joint-life payouts offer important legal protection for surviving spouses and partners and allow pension plans to be used as an effective retirement and estate planning strategy. However, it's important to consider your unique situation, as well as the pros and cons of joint-life payouts when making a decision.