When you die, your annuity will either end, continue for a specified duration for your beneficiary, or continue paying to the making it through individual (if it is a joint annuity), depending upon the choices you chose when you purchased it.

Key Takeaways

• Income annuities have various payment options, ranging from stopping payments to continuing to pay despite whether you're living or not.Deferred annuity payments are figured out by the kind of annuity and the phase you're in.If you pass away during a deferred annuity accumulation stage, your recipients receive the accumulated value.If you die after the deferred annuity payment stage begins, the type
• of annuity determines if payments continue or stop. Types of Annuities There are two broad classifications of annuity: Earnings: These are annuities designed to provide income streams for

  long periods.Deferred: These annuities are developed to offer various growth alternatives, with swelling sum or regular payments in the future. Income Annuities There are two types of earnings annuities: Immediate Earnings: Payments begin within one year of purchase, premium paid in one installment Deferred Earnings: Payments begin at

a future date(longer than

one year), premium paid in one installation,

• created to provide higher payments Immediate and Deferred Income Annuity Payment Alternatives Earnings annuities can be acquired with various payout and recipient choices, which apply to both Single Premium Income Annuities and Deferred Earnings Annuities: Life-Only: The insurance coverage

business pays only as long as the owner, called the annuitant, is alive. As soon as the annuitant passes away, the payments stop, no matter just how much cash is left over.Period Particular Just: The insurer makes payouts to a recipient for a particular period, whether the annuitant

• is living or not.Certain and Life: Comparable to the Period Specific Just option. This alternative pays during a particular duration, but if the annuitant dies, payments continue to a recipient up until the period ends.Installment Refund: Similar to the Particular and Life payout option, this option sets the payment duration based upon the preferred month-to-month payments and overall premium paid. The total is divided by the monthly payments to give the annuitant the payout duration, and the payment continues to the recipient up until the period ends.Cash Refund: Similar to the Installment Refund option, but if the annuitant dies, a lump amount is offered to the recipient equaling the leftover quantity in the annuity.Joint and Survivor: This plan offers income for a couple, with payments staying consistent as long as among them lives. The couple also has the alternative to have the annuity payment adapted to lower amounts if wanted. Deferred Annuities Deferred annuities do not right away start making payments; instead, they wait on a specific time to begin. The buyer usually contributes over a period of years, and the contributions grow through interest credited and intensifying interest. There are four types of delayed annuities: Fixed: The buyer's contributions grow at a set yearly rates of interest Repaired indexed: The buyer's contributions are credited interest based on modifications in a stock market index Variable: Contributions are bought various equity or bond funds or fixed-interest accounts. Returns will depend upon the performance of the funds in which the contributions are invested.Structured variable: Also called a Registered Index-Linked Annuity(RILA), contributions are invested in various funds, but they usually follow methods that provide market upside crediting and market drawback security. Deferred annuities have two unique phases that impact payment if you pass away: the
• build-up phase and the payment(distribution)stage. The build-up stage begins when you begin contributing and
• ends when you get a lump amount payment or start receiving a series of payments. If you pass away in this phase, your recipients will get the accumulated amount.
• Quick Fact Some annuity agreements consist of an ensured minimum survivor benefit, which pays a minimum amount to a recipient if something happens to the annuitant. If you pass away after the payout phase starts, whether the payments continue or not depends upon the

annuity type you have actually picked. If it is a Joint and Survivorship( joint income for life)annuity, the spouse or partner continues getting the advantage. If it is a Life-Only (income for life)annuity, as soon as you pass away, the payments stop, and the insurance company keeps any remaining funds. Who Gets the Money in an Annuity When You Pass away? It depends upon how the annuity is structured

. In some annuities, a recipient or joint owner keeps getting payments. In others, the remaining money might be offered to a beneficiary or kept by the insurer. Do Annuities Pass to Beneficiaries? It can pass to successors if it is structured to pass remaining money or payments to a recipient. If a household trust is called as the recipient and the proper type of annuity was chosen, the trust might distribute the staying cash to heirs. There are lots of factors that can impact how this may work, so it's best to speak to a legal representative or advisor familiar with

annuities and trusts about your circumstances. Does an Annuity Ever End? Annuities are not continuous, so each type has criteria for ending. Depending upon the type, the stopping point could be the annuitant's or joint owner's death or the end of a payment duration. The Bottom Line There are numerous types of annuities, each with various approaches for distributing cash or stopping payments after the annuitant(s)pass away. Before buying an annuity, it's best to do your research and evaluate your circumstances and criteria, then speak with a financial consultant or legal representative about your choices. Source