What typically happens to the account balance of an annuity when the annuitant passes away?

When the annuitant passes away, the typical outcome for the account balance of an annuity is that it is paid out as a death benefit to the beneficiary. This is a fundamental feature of many annuity contracts, which are designed to provide financial support not only during the lifetime of the annuitant but also for their chosen beneficiaries upon death. The death benefit ensures that the funds accumulated in the annuity can be transferred to the beneficiaries, allowing them to receive those assets directly rather than having them become part of the annuitant's estate or being lost to the insurance company.

This mechanism also highlights the annuity's role in estate planning and financial security for loved ones. Beneficiaries typically receive the full account balance or the death benefit amount specified in the contract, ensuring financial continuity for those left behind. Thus, the ability of the annuity to provide a death benefit is a critical aspect that influences the decision-making process for individuals considering annuities as part of their retirement planning or financial strategies.