If the annuitant dies during the accumulation period of an annuity, who receives the annuity benefits?

When the annuitant dies during the accumulation period of an annuity, the benefits are typically paid to the named beneficiary. This means that the individual designated to receive the annuity benefits will receive the value accumulated in the annuity, which can provide financial support to them. The presence of a named beneficiary is important because it ensures the proceeds go to a specific individual rather than being absorbed by the insurance company or going through the estate process.

There are specific rules regarding how these benefits are distributed based on the terms of the annuity contract, but generally, the intention of naming a beneficiary is to avoid the complexities that can arise with estate settlements.

In contrast, other options would not typically receive the annuity benefits directly. The insurance company would retain the funds only if there were no named beneficiary or if the account was structured in such a way as to revert back to them, which is less common. The insured's estate would usually involve a longer legal process of probate, which can delay distribution and incur costs, ultimately moving away from the purpose of the beneficiary designation. The annuitant’s children may receive benefits if they are explicitly listed as beneficiaries, but without that designation, they don't automatically gain rights to the annuity benefits.