Andy the annuitant dies before the annuity start date. Which of the following statements is true?

• A. The death benefit is paid to the beneficiary
• B. Premiums paid plus interest earned is returned to the beneficiary
• C. The policy terminates with no payout
• D. All premiums are forfeited to the insurer

Answer: (B)

When an annuitant dies before the annuity start date, the contract pays out the current account value to the beneficiary. That account value is the premiums paid plus any interest or earnings credited to the contract. So, the beneficiary receives premiums plus interest earned, i.e., the cash surrender value at that time. The other options don’t fit because there isn’t a separate death benefit beyond the cash value, the contract doesn’t simply terminate with no payout, and premiums aren’t forfeited to the insurer under the typical terms.