K, an annuitant, passes away before receiving payments equal to the contract value. What will happen?

When an annuitant passes away before receiving payments equal to the contract value, the terms of the annuity contract typically stipulate that the beneficiary will receive the remaining balance. This ensures that the intended financial support is provided to the beneficiary, allowing them to receive payments up to the total amount that was originally invested in the annuity. In this case, the contract continues to have value after the annuitant's death, and the beneficiary is entitled to the remaining payments until they equal the contract's total value.

The context of annuities generally ensures that the funds are not lost upon the death of the annuitant, aligning with the structure designed to provide financial security. The underlying principle is that the contract has a contractual obligation that extends beyond the life of the annuitant, safeguarding the financial interests of the beneficiaries. This option reflects the intent of ensuring that the financial contributions made into the annuity are honored and distributed accordingly.