New York State Life Insurance Exam Questions Practice Question
An annuitant dies during the accumulation period. What happens to the cash value in the annuity?
Correct Answer: A
Rationale: When an annuitant dies during the accumulation period, the cash value in the annuity is typically paid to the beneficiary designated in the contract. This ensures that the intended recipient receives the funds, providing financial support during a difficult time.
Option B is incorrect, as the cash value does not automatically go to the estate unless no beneficiary is named. Option C is also wrong; the IRS does not receive the cash value unless there are tax obligations upon withdrawal. Lastly, option D is inaccurate because the insurance company does not retain the cash value if a beneficiary is designated.
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