The Death Benefit

Usually shared among all annuities is a death benefit. Typically, the standard death benefit is the premium you paid minus any withdrawals. So even if your annuity’s cash value falls, the death benefit will still be the original premium. Although it is standard, you do pay for this in what is called a mortality and expense fee (M&E fees).

In addition to the standard death benefit, you can purchase an enhanced death benefit or a death benefit that locks in market gains or has a guaranteed increase. You will obviously pay for this as well in the form of higher contract fees. This is something I almost never recommend. This is like buying additional term insurance within your annuity. In my opinion, the extra fees are typically not worth the potential enhancement.