During the accumulation period, the death benefit of a deferred annuity is equal to what amount?

During the accumulation period of a deferred annuity, the death benefit is determined by the greater of the current cash value or the total premiums paid. This reflects the idea that the annuity should provide at least a return of the money that has already been contributed.

Current cash value accounts for the performance of the investments within the annuity during the accumulation period. If the investments have performed well, the cash value will be higher than the total premiums paid, thus maximizing the benefit to the beneficiary. Conversely, if the investments have not performed as well, the death benefit still ensures that the beneficiary receives an amount equal to the total premiums paid.

This structure protects the policyholder’s investment and maintains a level of assurance for beneficiaries, making the total premiums paid a vital benchmark when determining the death benefit. By ensuring the death benefit is the greater amount, the policy provides financial security to the beneficiaries, regardless of market fluctuations during the accumulation period.