Annuities held by parents, spouses, or any other loved ones can always be willed to beneficiaries. Annuity owners and their financial planners work with insurance providers to create contracts with suitable payout and beneficiary preferences.
Every annuity contract includes a death benefit provision where the owner can name a beneficiary to get the remaining annuity payments after their death. For example, with the death benefit provision, the owner can designate the beneficiary to receive all the remaining income or an absolute minimum, whichever is greater.
In the case of a joint or survivor annuity, the spouse inherits the annuity as the beneficiary and may choose to keep the contract going or opt for a death benefit.
Usually, the death beneficiary is specified in the initial application, but the owner can amend the beneficiary designation before his/her death. The annuity company will look into and confirm the beneficiary.