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Email this11:46 am
May 26, 2022
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How is the guarantee period payout calculated when the annuitant dies before the period. ie: 20 year guarantee of $600/mo and annuitant dies in year 11. Are the last 9 years paid out or is some sort of PV calculated?
4:36 pm
November 3, 2022
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With my annuity, the beneficiary for the guarantee period has to be designated in advance. They are paid the same monthly amount as the annuitant after his (my) death, for the guarantee period. It's rare to see guarantee periods of more than 10 years. Mine is lower to maximize the monthly payment.
5:01 pm
May 26, 2022
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You sure? If the beneficiary receives the amount in a lump sum isn't it discounted?
The difference between 10 and 20 years is only about $60 per month last time I got a quote in May age late 60's
5:14 pm
May 11, 2023
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Bottom line, does the annuity fully pay out if annuitant and successor dies before the length of annuity? Does it pay out to the estate?
And for what you put up front for the annuity, how does it pay out compared to the RRIF payments from GIC's or other investments?
Run your numbers here and see how it compares!!
A well managed RRIF will pay out to the estate.
5:36 pm
November 3, 2022
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NCC1701Z said
You sure? If the beneficiary receives the amount in a lump sum isn't it discounted?The difference between 10 and 20 years is only about $60 per month last time I got a quote in May age late 60's
Each annuity is a different case, unlike GICs, and the specifics vary quite a lot by company. For mine (Desjardins) there is no lump sum payout option on the guarantee. Beneficiary gets the same amount as I did for each month during the guarantee period. The difference between 5, 10 and 20 years guarantee was a lot more than $60 per month in my case (early 60s, with annuity deferred till after I turn 65).
5:46 pm
April 6, 2013
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There isn't an accelerated lump sum payout of the remaining payments from a life annuity when the annuitant dies before the guarantee period is over.
The monthly payments will continue to the beneficiary or estate for remainder of the guarantee period. If the beneficiary or estate would prefer a lump sum, then they would have to negotiate with the life insurance company.
Yes, there will be a haircut if one wishes to have the remaining 9 years of monthly payments now instead of over the next 9 years.
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