| Before you exchange your accumulated fund or | | | | For example, if the period certain is 10 years and |
| lump sum for lifetime income, you should know | | | | the annuitant received $1000.00 per month, but |
| what would happen if you pass away. This is | | | | dies 9.5 years from the annuitization date, then |
| especially so when you consider that you could | | | | the annuity provider must pay the beneficiary for |
| give up years of hard earned-funds without your | | | | the remaining six months ($6000.00). |
| estate or dependents receiving much in return. | | | | The straight life with refund option offers a nice |
| What would happen to those who are dependent | | | | proposition for beneficiaries. If the annuitant dies |
| on your annuity income? | | | | before receiving accumulated annuity income to |
| The answer to this salient question depends on | | | | the value of the purchase price of the annuity, |
| the annuity settlement option that you choose. | | | | the beneficiaries would be entitled to the |
| Annuity providers have you select this at the | | | | difference. For example, if the annuitant |
| start of the annuitization phase. You can choose | | | | purchased the annuity (with an accumulated fund |
| one out of at least four settlement options. Your | | | | or lump sum) for $100,000.00, but received |
| selection ultimately determines if your beneficiaries | | | | annuity income to the tune of $30,000.00, then |
| receive nothing, next-to-nothing or sufficient | | | | the annuity provider would refund $70,000.00 to |
| benefits. | | | | the annuitant's estate or beneficiaries. |
| The straight life option, which gives a higher | | | | The joint or last survivor option makes provisions |
| income to the annuitant, does not offer anything | | | | for the joint lifetime of two named parties- the |
| if the annuitant dies in the payout phase. It does | | | | annuitant and a contingent beneficiary. If one of |
| not matter how early the annuitant dies either. | | | | the two parties passes away before the other, |
| This is why the straight life option offers a higher | | | | the survivor would receive the benefits for the |
| payout in the first place; it frees the annuity | | | | remainder of his or her life at the same income |
| provider of any obligation towards your estate or | | | | level or at a reduced income level- according to |
| beneficiaries in the event of your death. | | | | the terms and conditions of the settlement option. |
| The straight life option with period certain offers | | | | The annuity settlement option is critical in |
| lifetime income as well, but with a guaranteed | | | | determining what happens to annuity income once |
| period. If the annuitant dies within the period | | | | the annuitant dies in the payout or annuitization |
| certain, the annuity provider must pay the annuity | | | | phase. Annuity providers have some latitude with |
| income due for the remainder of the guaranteed | | | | terms and conditions related to settlement |
| period only. However, if the annuitant dies once | | | | options. Therefore, annuitants must consider their |
| the guaranteed period is up, the annuity provider | | | | dependents, estate and financial circumstances in |
| has no further obligation on that annuity contract. | | | | choosing an appropriate settlement option. |