If an annuitant dies before receiving payments equal to the contract value, what ongoing payment is made to the beneficiary?

When an annuitant dies before receiving payments that total the contract's value, the beneficiary is entitled to ongoing payments that will eventually equal the contract's total value. This option ensures that the beneficiary receives the benefits of the annuity as intended by the contract.

The reason for this provision is to protect the financial interests of the annuitant and to ensure that the contributions made into the annuity are not lost upon the premature death of the annuitant. This approach is particularly common in various types of annuity contracts which might promise a minimum payout guarantee.

This structure of payments allows the beneficiary to receive funds over time, which can be beneficial for their financial planning. It also balances the risk for the insurance company by ensuring that they don’t have to make an immediate lump-sum payout unless the circumstances dictate it, while still fulfilling the contractual obligation to provide value from the annuity.