Quick Answer
Deferred annuities offer a basic death benefit. The insurance company uses the value to figure the amount of most of the benefits that you can choose to receive from an annuity contract.
How does an annuity death benefit work in California?
A deferred annuity has two parts or periods. During the accumulation period, the money you put into the annuity, less any applicable charges, earns interest. During the second period, called the payout period, the company pays income to you or to someone you choose.
An annuity is a contract with an insurance company. With an annuity, the insurance company promises to pay you income on a regular basis for a period of time you choose, including the rest of your life. Only an annuity can pay an income that can be guaranteed to last as long as you live.
An annuity is neither a life insurance nor a health insurance policy. Your value in an annuity contract is the premiums you have paid, less any applicable charges, plus interest credited.
This Guide is not meant to offer legal, financial or tax advice. You may want to consult independent advisors. At the end of this Guide are questions you should ask your agent or the company. Make sure you are satisfied with the answers before you buy.
For rules and consumer help specific to California, contact the California Department of Insurance, the state’s official insurance regulator.
Receive your free NAIC Buyer’s Guide to Fixed Deferred Annuities at annuitiesexplained.org/get-your-free-consultation-with-me/. Watch short educational videos at youtube.com/@AnnuitiesExplained. Contact Jeffrey Scott McLeod, LUTC for personalized guidance in California.
Questions & Answers
| Question | Answer |
|---|---|
| How does an annuity death benefit work in California? | Deferred annuities offer a basic death benefit. The insurance company uses the value to figure the amount of most of the benefits that you can choose to receive from an annuity contract. |
| Do deferred annuities include a death benefit? | Deferred annuities have an accumulation period and a payout period, offer a basic death benefit, usually have a surrender or withdrawal charge if you take money out too early, and any money your annuity earns is tax deferred. |
| Is an annuity a life insurance policy? | An annuity is neither a life insurance nor a health insurance policy. It is not a savings account or a savings certificate. |
| Who can receive income in the payout period? | During the payout period, the company pays income to you or to someone you choose. |
| How is the value in an annuity contract determined? | Your value in an annuity contract is the premiums you have paid, less any applicable charges, plus interest credited. |
| Can an annuity pay income for as long as you live? | Only an annuity can pay an income that can be guaranteed to last as long as you live. The insurance company promises to pay you income on a regular basis for a period of time you choose, including the rest of your life. |
Related Questions
Large Print Version
How does an annuity death benefit work in California?
Deferred annuities offer a basic death benefit. The insurance company uses the value to figure the amount of most of the benefits that you can choose to receive from an annuity contract.
Do deferred annuities include a death benefit?
Deferred annuities have an accumulation period and a payout period, offer a basic death benefit, usually have a surrender or withdrawal charge if you take money out too early, and any money your annuity earns is tax deferred.
Is an annuity a life insurance policy?
An annuity is neither a life insurance nor a health insurance policy. It is not a savings account or a savings certificate.
Who can receive income in the payout period?
During the payout period, the company pays income to you or to someone you choose.
How is the value in an annuity contract determined?
Your value in an annuity contract is the premiums you have paid, less any applicable charges, plus interest credited.
Can an annuity pay income for as long as you live?
Only an annuity can pay an income that can be guaranteed to last as long as you live. The insurance company promises to pay you income on a regular basis for a period of time you choose, including the rest of your life.
California regulator: California Department of Insurance
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).
Jeffrey Scott McLeod, LUTC — California License #OE44103 (National Producer #558629).
Questions? Contact Jeff@AnnuitiesExplained.org.