A death benefit is money paid to your designated beneficiaries when you die, typically from life insurance policies but also included in many annuity contracts and some retirement accounts. For annuities, the death benefit ensures that if you die before receiving back what you invested or before payments begin, your beneficiaries receive something—preventing the insurance company from simply keeping your money.

In annuity contracts, death benefits vary based on the type of annuity and what options you've selected. Basic death benefits typically guarantee that beneficiaries receive at least what you paid in minus any withdrawals you've already taken. Enhanced death benefits (available through riders) might guarantee the highest account value reached on certain anniversary dates, step up the benefit by a certain percentage each year, or provide other protections. Once you've annuitized and started receiving payments, death benefits depend on your payout structure—straight life annuities typically have no death benefit, while period certain or joint and survivor options continue payments to beneficiaries.

Understanding the death benefit provisions in your annuity is important for estate planning. If leaving money to heirs is a priority, you might choose an annuity structure with stronger death benefit protections, even if it means lower income payments during your lifetime. Conversely, if maximizing your own retirement income matters most, you might select options with minimal or no death benefits. There's no right answer—it depends on your priorities, whether you have other assets to leave behind, and what matters most to you and your family.