Understanding Death Benefit Provisions for Lifetime Annuities

Whenever you are considering purchasing lifetime annuities, you want to make sure that you understand the possible death benefit provisions that you could have. Here are the basics of death benefit provisions for lifetime annuities.

Guaranteed Term

One of the most common types of debt benefits with lifetime annuities is that you will have a guaranteed term. This means that once the annuity starts, there will be a certain amount of time that the annuity company is going to pay your family if you pass away. For example, if you have a lifetime annuity with a 10 year term and you pass away after one year, the annuity company is going to continue paying your annuity payment to your family for the next nine years.

Lump Sum

In some cases, you might also get a lifetime annuity that is going to pay a lump sum to your beneficiaries. The lump sum might be equal to the amount of money that you have paid into the annuity minus expenses. In some cases, the lump sum can be greater than the amount that was paid in through regular premium payments because of investment gains. Every annuity that pays a lump sum is going to have different terms associated with it.

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