If the owner of an annuity dies during the accumulation stage, what is true?

If the owner of an annuity passes away during the accumulation stage, the beneficiary typically receives the total amount that has been paid into the annuity. This reflects the intention behind the design of annuities to provide financial security and value to the beneficiary in the event of the owner's death.

During the accumulation phase, the annuity does not yet begin making periodic payments, and the investment has not yet matured into an income stream. Instead, it has built up value based on the premiums contributed by the owner. Therefore, the beneficiary is entitled to the sum of all premium payments made prior to the owner's death, ensuring that the financial benefits can still support the beneficiary after the owner's passing.

While options may mention concepts like cash value or penalties for withdrawals, in the context of the owner's death, the standard practice is that the beneficiaries are entitled to the full amount contributed. The annuity does not get forfeited to the insurer in such cases, as that would defeat the purpose of providing financial protection to the named beneficiaries.