Cash Refund Annuity

(redirected from Lump Sum Refund Annuities)

Cash Refund Annuity

An annuity with a provision stating that if the annuitant does not receive payments at least equal to the amount he/she paid as contributions, then some beneficiary (such as a relative of the annuitant) receives the difference in a lump sum. This reduces the risk to the annuitant that the annuity will prove to be a bad investment. However, it does not protect the insurance company providing the annuity. A cash refund annuity is also called a lump sum refund annuity. See also: Installment Refund Annuity.