Which annuity ensures the beneficiary continues payments until the total amount has been paid out?

Which annuity ensures the beneficiary continues payments until the total amount has been paid out?

• A. Life Annuity - Cash Refund
• B. Instalment Refund Annuity
• C. Joint Life Annuity
• D. Deferred Annuity

Answer: (B)

When choosing an annuity payout option, think about what happens to the payments if the annuitant dies early and whether the original amount funded will be fully paid out. An Instalment Refund Annuity guarantees that if the annuitant dies before the total amount funded has been paid out, the remaining balance is still paid to a beneficiary, but in installments, until the entire initial amount has been exhausted. This means the beneficiary continues to receive payments until the full value is reached, rather than receiving a lump-sum refund or ending the payments at death. This differs from a Life Annuity with Cash Refund, which provides lifetime payments to the annuitant and, if death occurs before the full amount is paid, a lump-sum cash refund to a beneficiary for the remaining balance. A Joint Life or Deferred annuity works differently in terms of who is covered and when payments start, but they don’t specifically ensure that the total payout is delivered as installments until the original amount is paid out.

When choosing an annuity payout option, think about what happens to the payments if the annuitant dies early and whether the original amount funded will be fully paid out. An Instalment Refund Annuity guarantees that if the annuitant dies before the total amount funded has been paid out, the remaining balance is still paid to a beneficiary, but in installments, until the entire initial amount has been exhausted. This means the beneficiary continues to receive payments until the full value is reached, rather than receiving a lump-sum refund or ending the payments at death.

This differs from a Life Annuity with Cash Refund, which provides lifetime payments to the annuitant and, if death occurs before the full amount is paid, a lump-sum cash refund to a beneficiary for the remaining balance. A Joint Life or Deferred annuity works differently in terms of who is covered and when payments start, but they don’t specifically ensure that the total payout is delivered as installments until the original amount is paid out.