how does the death benefit work on an annuity 
some annuity contracts allow you to name a beneficiary to inherit remaining annuity payments typically a beneficiary reports annuity income as the plan participant would have included it as gross income but they may exclude an amount equal to the deceased employee s payments toward the contract 2the bottom linedeath benefits are designed to provide funds to beneficiaries so they can receive financial support following the death of the insured a death benefit can help offset the expenses of funeral services or provide money for necessary life expenses among other purposes if you are naming beneficiaries in a contract or inheriting a death benefit consider consulting a financial professional to guide you through your options for your specific situation 