What happens to the annuity after the death of the policyholder?

The annuity continues making payments until your death. Upon your demise, the remaining annuity balance is paid out to the nominee named as the beneficiary. This is called the death benefit. Any remaining guaranteed income period would also go towards the beneficiaries. Most annuities allow the owner to name a beneficiary, providing control over assets after death.

It is important to name a beneficiary when purchasing the annuity to ensure funds are passed on according to your wishes. Consider your desired legacy and discuss with the annuity agent whether to have payments continued for a surviving heir. The nominee could be a spouse, child or other heir. Be sure to keep the nominee information up to date with the annuity provider. The annuity death benefit allows you to transfer any remaining wealth to your nominee after your lifetime. An annuity calculator helps you understand the yearly annuity you would receive based on the investment amount, expected rate of returns and the life expectancy.