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What Happens to the Money in an Annuity When You Die?

Published August 1, 2019

What happens to the money in an annuity when you die depends on the type of annuity and the options chosen. If you have an immediate or longevity annuity and pass away, the contract will terminate unless you include a refund at death (a.k.a. cash refund or death benefit).

Including the refund at death ensures that a beneficiary receives the premium paid less any income payments the owner had received prior to death. For a fixed, variable, or indexed annuity, the cash value of the contract will typically be given to the beneficiary upon death of the owner. In some limited instances, the death benefit of a fixed, variable, or indexed annuity will be slightly less than the cash value if the owner passes during the period when a surrender charge would have otherwise applied.

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If you’re interested in reading more, here are several articles on immediate annuities.

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Nimish Shukla

Nimish Shukla

Financial Planning Professional

Nimish has spoken with thousands of customers about retirement spending. As a CFA Charterholder and licensed fixed annuity producer he values the importance of building an income stream for retirement. In addition to his work at Blueprint Income he is also a regular contributor to Nerdwallet.

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