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Many years ago, before I was handling my mom's finances, her insurance agent advised her to put some inheritance into an annuity fund. I was aware of it, but since I was not really involved at that point, I didn't pay much attention. She received a small deposit into her account monthly. I really wasn't aware of how much she put into the annuity. By the time I took over her finances, the agent was no longer with the company and the financial institution that originally held the annuity was apparently taken over by Natiinwide. When I attempted to track down her account, I hit dead ends all over. Now that she is deceased, I received a letter saying that the financial institution who now holds her annuity learned she was deceased and will now stop making annuity payments. There was no information regarding any remaining balance. If she is deceased, the letter said, I should just file the letter. But what if there IS money left? Even a few hundred would help to pay her final expenses. I was also told I'd have to return any payments made after her death. This wasn't "free money". It was hers. Am I missing something here?

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You really need to find and read the paperwork on the original annuity. Some annuities (and the one that I am eligible to buy into upon retirement) makes no guarantee that the subscriber will get all the money that they put into the annuity. Payments cease upon death of the subscriber, unless the payout is specifically "5 year certain" or "10 year certain", meaning that, for those options, monthly payments are decreased for the subscriber, but a guarantee made to pay out to the beneficiary for a set amount of time.
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Yes, that's what an annuity is. You get a fixed amount of money per month/year for your lifetime, or for a joint lifetime if you take a reduced payment in order to provide a survivor benefit for a second person's lifetime.

Sometimes an annuity will guarantee payment for a certain period of years, as Barb mentioned. You pay for that with a reduction in your monthly payment, but there's assurance that if you die prematurely, a minimum amount will be paid out to somebody. Occasionally an annuity will come with a cash refund option, which means if you die before getting back at least what you put into it, you get the balance in a lump sum. It would be rare for a commercial insurance company to provide that though - they'd never make money that way.

Yes, you should obtain some documentation about the terms of the annuity. But the likelihood is, the payments do end on her death.
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You need to find the original documents and read them. There's a zillion ways an annuity can pay out and yes, some have payments that end at death. Those that have survivors' benefits pay out less. Read the documents.
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Thanks. I'm going to excavate the mountains of Mom's paperwork and see if I can find the original documents. I'm sure you're both right. My husband's annuity must be different. His is more like a savings account. I just thought the deposits would continue until her funds were exhausted. Oh, well.
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