Jointly owned annuities are similar to annuities owned by a single person in that the death benefit is triggered by the death of one of the owners. This means that although the second owner is still alive, the annuity will pay out the death benefit to the beneficiary.

What is spousal continuation of an annuity?

A spousal continuation is a death benefit option for the surviving spouse that allows the beneficiary to assume ownership of the annuity contract preserving tax-deferred growth as long as the contract remains in force.

How does joint ownership of an annuity work?

With a joint bank account, either of the persons named on the account can make a withdrawal from the account independent of the other. However, with join ownership of an annuity, the signatures of both owners are required to exercise the rights of ownership.

What’s the difference between a qualified and a non qualified annuity?

A non-qualified annuity is purchased with after-tax dollars that were not from a tax-favored retirement plan. Non-qualified annuity premiums are not deductible from gross income. All annuities are allowed to grow tax-deferred. This means any earnings on the investment are not taxed until they are paid out to the annuity holder.

Can you transfer ownership of a non qualified annuity?

The Transfer of Ownership of a Non-Qualified Annuity. The growth in the annuity isn’t taxable until you withdraw it, and some annuities offer guarantees on your principal and returns. Your annuity is likely tied to your life, but you might transfer ownership for tax or cash flow reasons.

Is there an exception to the non natural owner rule for annuities?

However, this special exception will not apply in the case of an employer who is the nominal owner of an annuity contract under a non-qualified deferred compensation arrangement for its employees. Immediate annuities are also excepted from the non-natural owner rule.