Definition of "Cash Refund Annuity"

An annuity contract which pays the income benefit for the life of the annuitant and in the event that the annuitant dies prior to the income received equaling the premiums paid, the beneficiary will receive the difference in a lump sum payment. In this form of annuity the insurance company guarantees to return at least the amount of the premiums to the annuitant or to his or her beneficiary.