Under a Non-Qualified Fixed Annuity:
- If death occurs before the annuity starting date, all beneficiaries must take a distribution in a lump-sum or within five years of death, or under lifetime periodic payments beginning within one year of the owner's death.
- If the beneficiary is the owner's surviving spouse, several options are available. He or she can elect to become the new owner and continue the contract, in which case, tax-deferral will continue, make withdrawals from the contract, or take a periodic income.
Contingent deferred sales charges may apply upon the death of the owner, if the owner is not also the annuitant. In either event, the value of the annuity will be included in the original owner's estate for estate tax purposes, but will avoid the delays and expense of probate, if paid to a named beneficiary.
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