What happens to an annuity after death depends heavily on the payout option you chose and how far along the contract was when you passed away. There’s no single universal answer, but the possibilities generally fall into a few categories.

During the accumulation (deferred) phase

If you die before starting income payments, most deferred annuities pay a death benefit to your named beneficiary, typically at least the remaining account value, and sometimes a guaranteed minimum death benefit if the contract includes that feature. This generally passes directly to your beneficiary outside of probate, similar to a life insurance death benefit.

After income payments have started

This is where the payout option you selected matters most:

• Single life, no period certain: payments stop at death, and typically nothing further passes to heirs from that income stream.
• Joint life: payments continue to the surviving spouse for their lifetime.
• Period certain: if you die before the guaranteed period ends, remaining payments (or a lump sum equivalent) go to your named beneficiary for the rest of that period.

Why the payout election matters so much

Choosing a single-life payout with no period certain generally maximizes your income while you’re alive, but it means nothing continues to heirs from that stream after death. Adding a period-certain guarantee or choosing joint life reduces the payment somewhat but protects a spouse or beneficiary. This is exactly the kind of trade-off worth thinking through carefully before locking in an election, since many of these choices are irreversible once income begins.

This article is educational and general in nature. It isn’t personalized financial advice. All guarantees are subject to the claims-paying ability of the issuing insurance company.