If an annuitant dies before annuitization, what will the beneficiary receive?

When an annuitant dies before the annuitization phase, the beneficiary is entitled to receive either the total amount the annuitant paid into the plan or the cash value of the plan, whichever is greater. This provision ensures that the beneficiary is compensated for the investment made and benefits from any interest or growth that may have occurred in the cash value of the annuity.

This mechanism protects the beneficiary’s financial interest, allowing them to receive the more favorable option between the total contributions and the current cash value. It upholds the principle of fairness, ensuring that the beneficiary does not lose out on the prospective growth of the annuity if the cash value exceeds the contributions. This is a critical feature in annuity contracts, designed to provide security and financial assurance to the annuitant's beneficiaries in the event of an early death.