If an annuity is said to have a 'reversion' this means:

• A. the annuity rate is higher than normal because the investor is in bad health
• B. part of the annuity will continue to be paid to a nominated survivor, following the death of the investor
• C. the annuity rate is lower than normal because the investor is in excellent health
• D. the annuity will increase annually in line with the rate of inflation

Answer: (B)

A reversion in an annuity means that after the original annuitant dies, payments continue to a named survivor. This provides ongoing income for a spouse or other beneficiary for as long as the survivor lives, or for the agreed portion of the payments. It’s not about health-based adjustments to the rate, nor about inflation-linked increases. So the correct interpretation is that part (or all) of the annuity will continue to be paid to a nominated survivor following the investor’s death.