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An annuity is an insurance product that pays out regular income after retirement. An annuity is a plan that helps you to get a regular payment for life after making a lump sum investment to the insurance company. The life insurance company invests the money of the investor and pays back the returns generated from it. In case the policyholder of an annuity plan dies, the treatment of the annuity plan depends on the annuity option exercised by policyholder while buying the plan.
Treatment of annuity after death of policyholder under various annuity options
Annuity for life - In this case, payment of annuity ceases on death of the annuitant.
Annuity for life with return of purchase price on death - On death of the annuitant, payment of annuity ceases and the purchase price is returned to the nominee.
Annuity payable for life with 100% Annuity payable to spouse on death of annuitant with return on purchase of Annuity - On death of the annuitant, Annuity is paid to the spouse during his/her life time and purchase price is returned to the nominee after the death of the spouse.
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