Upon the death of the annuitant in a deferred annuity contract, what benefit is typically provided?

In the context of a deferred annuity, when the annuitant passes away, a lump sum death benefit is typically paid to the beneficiary. This benefit is designed to provide financial support at the time of the annuitant's death, ensuring that the accumulated funds within the annuity are transferred to the designated beneficiary. This payment often represents the total account value at the time of death, which may include both contributions and any interest earned.

This feature is crucial, as it allows for the protection of the estate's value and serves to provide a financial safety net for the annuitant's beneficiaries. The lump sum payment also allows beneficiaries to have immediate access to the funds without needing to wait until the annuity matures or payments begin in the future.

In contrast, other options such as increased cash value or fixed annual payouts do not typically occur upon the death of the annuitant in this specific framework, as the primary focus of a death benefit is on providing a straightforward and immediate financial benefit to the beneficiaries rather than just an adjustment or continuance of benefits that would not align with common practices.