Another frequent question that is raised concerning annuities is, “What happens to my annuity after death? After I die, how does my annuity play out and pay out?”
This is a quality question that deserves some serious attention.
What happens with your annuity after death completely depends upon the type of annuity you have chosen and how you have structured your payouts.
There are many methods to go about choosing. Let’s explore them a bit.
My Annuity After I Die
When you purchase an annuity, you will be allowed to name a beneficiary. This is a person who will receive the benefits of your annuity after you die, if in fact there are still benefits to be received.
There are payout options that include payouts to your beneficiary after your death purposefully, and there are also payout options that include these payments to the beneficiary if you were to die suddenly before expected.
We spoke about this a bit in the Annuity Payout Options article. There is the annuity payout option called the beneficiary payment or sometimes called a joint or survivor annuity. So you can intentionally sign up with a spouse, perhaps, as a joint or survivor member of the account, who will receive the payouts after you perish. This is great for married people or wealthy people who have children.
No Payments From Annuity After Death
There is also the option to not receive any annuity payments after you die. You can get a guaranteed payment period that will end before your death, hopefully, and at a certain point you will simply stop receiving payments.
There is also a payment type that will give you payments, calculating the value differently as time passes, so that you can continue to receive payments from the annuity until death. This is probably a good idea for those without much family to support them or who may suffer from poor health and won’t have the option to go obtain a part time job.
Annuity Death Options
These are your options for annuities and death. You can have annuity payments after death, annuity payments up till death, or no payments from your annuity after death at all. These are the three main annuity death options. Of course, how you structure each individually will be up to you, and you should cover yourself with plenty of research before choosing your annuity. Always consider your annuity after death, not just while you live.