Stan paid an insurance company $50,000 for a fixed annuity when he was 50 years old. At age 62, Stan plans to begin to receive payments from the insurer. There are no guarantees on the number of payments he will receive. Based on the description provided, what happens if Stan dies at age 60?

A. Stan's beneficiary will receive nothing from the insurance company.
B. Stan's beneficiary will receive the investment income earned from age 50 to 62, but the insurance company will keep the $50,000 to supplement payments to other annuitants.
C. Stan's beneficiary will receive monthly payments until the $50.000 Stan paid is returned.
D. Stan's beneficiary will receive the $50,000 Stan paid and the insurance company will keep all the investment income earned from age 50 to 62.

Option d) Stan's Beneficiary will receive the 50,000 USD that Stan paid and the insurance company will keep all the investment income earned from age 50 to 62.

Explanation:

So, we know that the correct option is D. Let's give you some briefing about fixed annuity.

So what is annuity:

Annuity is a contract or a product through which people get fixed payments once they retire. Those payments are made depending upon the total amount submitted by the individual.

Here, in this case, Stan paid fixed annuity of 50,000 USD when he was 50 years old. And financial companies starts to release the payments to individual after a selecting number of years later in the future for example in this case it is 62 which means 12 years after the deposit. But the individual expires before 62 and it doesn't mean that the family of that person will get nothing out of that massive 50,000 USD.

So, the rule is, Stan's family will get that initial amount invested and the company will get the amount of money earned during the period of 50 to 62 years out of that 50,000 USD invested.

This is only the case in option D. so the correct option is D.

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