Question

If the annuitant dies before the principal sum is depleted, the Refund Life Annuity Option will pay the entire annuity amount to the beneficiary in a lump sum payment or over scheduled installments.

Answer 1

The Refund Life Annuity Option pays the entire annuity amount to the beneficiary if the annuitant dies before the principal sum is depleted, and it can be received as either a lump sum or scheduled installments.

Step-by-step explanation:

Refund Life Annuity Option

The Refund Life Annuity Option is a feature of an annuity contract that provides a payout to the beneficiary if the annuitant dies before the principal sum is depleted. Under this option, the entire annuity amount is paid out either in a lump sum or over scheduled installments to the beneficiary.

For example, let's say John has a refund life annuity with a principal sum of $100,000. If John passes away and there is still $50,000 left in the annuity account, the beneficiary would receive this remaining amount either in one lump sum or through scheduled installments.