What happens to an annuity when you die?
When you die your annuity payments will usually stop. But that doesn’t always have to be the case. Depending on your product, you might be able to make sure a loved one is financially taken care of after you’ve gone. That can give you and them valuable peace of mind.
Annuity calculator
It’s simple to use, and provides a helpful estimate of your potential guaranteed income in retirement. How much could you get?
Does an annuity stop when you die?
No – you might be able to arrange for a surviving loved one to benefit from it. The exact details will depend on your product and provider. And if you choose this kind of benefit, your provider will offer you a lower annuity income in return.
You’ll probably be able to choose between some or all of these three benefit types. They’re usually known as death benefits, which is a depressing way of describing something that’s actually quite positive:
Annuity guarantee period
This lets you set up an annuity guarantee period of between one and up to thirty years. The exact possible period can depend on how old you are when you’re setting up your annuity.
For example, we’ll only guarantee your annuity up until you’re 100. So if you’re setting one up with us when you’re 70, your maximum guarantee period will be 30 years.
If you die during that period, your provider will pay any remaining benefits to your chosen beneficiary. That money can go to anyone you choose.
Annuity value protection
This lets you protect a quarter, half, three quarters or all of the money you spend on your annuity. When you die, your provider will pay that amount of it back to anyone you choose, minus any money they’ve already paid to you.
Joint annuity payments continue
This lets you choose 50%, 67% or 100% of your income payments to continue being paid to a loved one after you die. You'll need to name who you want the payments to go to when you set up your annuity. You can learn more in our article 'What is a joint life annuity?'
What’s next?
We hope that’s helped you understand what happens to an annuity when you die. UK people can find out more by:
- Trying our Annuity Calculator, which will help you explore your annuity choices
- Visiting our product page to find out more about our own annuity
- Checking out our Guide to buying an annuity to see what your next steps could be
For more information on annuities, visit the Pension Wise website. It's a free government guidance service from MoneyHelper. If you're looking for retirement advice, we offer a Retirement Advice service.
Related articles
How much does an annuity cost; £100k, £300k and £500k pension pots
Types of annuity
14% rise in annuity rates in two years
Sign up to our newsletter
Subscribe to our newsletter for tips on how to make the most of your money now, and in the future.
Our team hand picks a selection of our latest articles and stories that we think you’ll find interesting. Subscribe to our newsletter and have the opportunity to enter exclusive prize draws, be invited to share your own stories, and be kept updated with tips and tricks to help you manage your finances.
By providing your email address you're giving consent for us to send you emails with news, information and offers on the products and services provided by Legal & General. Legal & General take your privacy seriously; this is why we never share your personal details with anyone else for their own marketing purposes. You can opt out of these emails at any time. Read our privacy notice to understand how we process your information.