Legal Definitions - refund annuity

A refund annuity is a type of annuity that provides payments to the annuitant for their lifetime. Upon the annuitant's death, any remaining balance is paid to their estate. This type of annuity is often used as a form of retirement income.

For example, if an individual purchases a refund annuity for $100,000 and receives $50,000 in payments over their lifetime, the remaining $50,000 would be paid to their estate upon their death.

Refund annuities provide a sense of security for the annuitant, as they know that any remaining balance will be paid to their loved ones. This type of annuity is often preferred by those who want to ensure that their heirs receive some benefit from their investment.