What Happens To Annuities Upon Death? 
Annuities upon death are designated to the beneficiaries whatever is left in the policy . They are tax deferred and are designed to accumulate cash value . and interest until payout at age 59 1/2 . They are taxed as income when payout but not at pay in . Its better to get the deferred annuity , but in situations depending on need immediate annuities are used . 