Legal Definitions - nonrefund annuity

A nonrefund annuity is a type of annuity that guarantees payments to the annuitant during their lifetime, but does not provide any refund to anyone upon their death. An annuity is an obligation to pay a stated sum, usually monthly or annually, to a stated recipient. These payments terminate upon the death of the designated beneficiary.

For example, if John purchases a nonrefund annuity, he will receive guaranteed payments for the rest of his life. However, if John dies before receiving the full amount of his annuity, there will be no refund to his beneficiaries.

Nonrefund annuities are also known as straight life annuities or pure annuities. They are often used as a source of retirement income.