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In addition, the policy's cash value combines with your death benefit for a higher payout to beneficiaries. However, a modified endowment contract irreversibly restricts access to the account's ...
A straight life annuity is a form of annuity that makes payments for a single person's life. It does not pay a death benefit, nor does it pay spousal benefits. The annuity payments end when the ...
Some annuity payments end upon the owner’s death, while others offer death benefits.
Keeping the total payment per year equal to 1, the longer the period, the smaller the present value is due to two effects: The payments are made on average half a period later than in the continuous case. There is no proportional payment for the time in the period of death, i.e. a "loss" of payment for on average half a period.
Cash values are an integral part of a whole life policy, and reflect the reserves necessary to assure payment of the guaranteed death benefit. Thus, "cash surrender" (and "loan") values arise from the policyholder's rights to quit the contract and reclaim a share of the reserve fund attributable to his policy.
Life annuities may be sold in exchange for the immediate payment of a lump sum (single-payment annuity) or a series of regular payments (flexible payment annuity), prior to the onset of the annuity. The payment stream from the issuer to the annuitant has an unknown duration based principally upon the date of death of the annuitant.
Opting for a joint-life contract, which ensures payments continue to a spouse after your death, often means a smaller monthly payout compared to a single-life contract.
Such cash value credited to an individual account during the tenure of the policy keeps growing with every payment of premium. It also increments due to interest credited. If a policyholder dies without using the cash value, the policyholder's beneficiaries will only receive the death benefit and not the cash value.