Misunderstanding #3 - "When I die the annuity company keeps my money!!"

Annuity Truth - the short answer to this Annuity Misunderstanding is:

"The annuity company only keeps the money if you let them..." 

Here's what I mean:

• 99.5% of my clients receive their guaranteed lifetime income payments by using an Income Rider.  Then, whenever the client or the client & spouse die, 100% of the balance in their Retirement Account goes to their heirs outside of probate - the annuity carrier does NOT keep the money 
• For the other 0.5% of my clients who are receiving their lifetime income payments, they decided not to use an Income Rider, and they specifically chose to receive their payments as "Single Life" or "Joint Life"  annuitizations, similar to the payouts from their pensions or Social Security.  They had specific reasons to receive their payments as "Single Life" or "Joint Life" payments.
• And, let's not forget people who die when their annuities are simply earning deferred interest, i.e. they're NOT receiving a lifetime income from their annuities - they're simply using an annuity to safely grow their money tax-deferred.        

         When those people pass on, 100% of the money in the deferred annuity passes to                 their heirs outside of probate.

So...  the only way in which your money remains with the annuity company when you die is if you agree to it when you complete the annuity application by specifically stating that you wish to "annuitize" your contract with a "Life Only" or "Joint Life" option, and then you agree a 2nd time when the annuity contract is delivered, and you're able to review the contract during a 2 week "free look" period.

And, even if a client chooses to "annuitize" the contract with the "Life Only" or "Joint Life" option, the money can still be set up so that any remaining money goes to the heirs with a "Life with Period Certain" or "Life with Cash Refund" option.

So, for the 99.5% of my clients who did not "annuitize" their annuities, their heirs will receive the balance of their Retirement Accounts when they pass on - the annuity company will not keep the money.

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