Quick Answer
Deferred annuities offer a basic death benefit. The NAIC Buyer’s Guide does not cover how a death benefit is paid or other details of what happens to an annuity when you die.
Questions & Answers
| Question | Answer |
|---|---|
| What happens to an annuity when you die? | Deferred annuities offer a basic death benefit. The NAIC Buyer’s Guide does not cover how a death benefit is paid or other details of what happens to an annuity when you die. |
| What is an annuity? | An annuity is a contract with an insurance company. The company promises to pay you income on a regular basis for a period of time you choose, including the rest of your life. |
| Can annuity income last as long as you live? | Only an annuity can pay an income that can be guaranteed to last as long as you live. |
| How is an annuity’s value figured? | Your value in an annuity contract is the premiums you have paid, less any applicable charges, plus interest credited. The insurance company uses that value to figure the amount of most of the benefits you can choose to receive. |
| What happens during the payout period? | During the payout period, the company pays income to you or to someone you choose. |
| Are there charges for taking money out early? | A surrender or withdrawal charge may apply if you take part or all of the money out of your annuity during a set period of time. |
| What is a free look or right to return? | In many states a free look or right to return period gives you a set number of days to change your mind after you buy. |
Related Questions
Large Print Version
What happens to an annuity when you die?
Deferred annuities offer a basic death benefit. The NAIC Buyer’s Guide does not cover how a death benefit is paid or other details of what happens to an annuity when you die.
What is an annuity?
An annuity is a contract with an insurance company. The company promises to pay you income on a regular basis for a period of time you choose, including the rest of your life.
Can annuity income last as long as you live?
Only an annuity can pay an income that can be guaranteed to last as long as you live.
How is an annuity’s value figured?
Your value in an annuity contract is the premiums you have paid, less any applicable charges, plus interest credited. The insurance company uses that value to figure the amount of most of the benefits you can choose to receive.
What happens during the payout period?
During the payout period, the company pays income to you or to someone you choose.
Are there charges for taking money out early?
A surrender or withdrawal charge may apply if you take part or all of the money out of your annuity during a set period of time.
What is a free look or right to return?
In many states a free look or right to return period gives you a set number of days to change your mind after you buy.
Source: © 2025 National Association of Insurance Commissioners (NAIC). Reprinted with permission. Further reprint or distribution strictly prohibited without written permission of NAIC.
Annuities Explained is not affiliated with or endorsed by the National Association of Insurance Commissioners (NAIC).
Educational content provided by Jeffrey Scott McLeod, LUTC, National Insurance Producer License #558629. This is for informational purposes only and is not a recommendation to buy or sell any annuity. Guarantees are subject to the claims-paying ability of the issuing insurance company. Always consult your own advisor and read the full NAIC Buyer’s Guide. For residents of your state. Jeffrey Scott McLeod, LUTC — National Producer #558629. Questions? Contact Jeff@AnnuitiesExplained.org.