What to do when a National Life Group account holder dies

The Beneficiary Agreement Request (Cat. No. 40447) — the same form used for life policies. Its General Provisions carry an "Agreement Covering Annuity Contract" clause: where an annuity contract is covered, "policy" means "annuity contract" and "Insured" means the person on whose death the annuity death benefit is paid. The Policy Change Request for Annuity (Cat. No. 100305) states on its face, "Do not use this form to request a Change of Beneficiary" — it handles ownership, name, payment, and tax-qualification changes only. Both forms are at nationallife.com/Contact-Service-Forms. Filing a new Beneficiary Agreement Request revokes every prior designation on the policies listed, so re-list anyone you intend to keep.

A life insurance death benefit is generally income-tax-free and pays out in one sum to the beneficiary class named on the Beneficiary Agreement Request. An annuity death benefit is taxable to the extent of the gain and forces you to elect a payout. On a NONQUALIFIED National Life annuity, a beneficiary may take a lump sum, fully liquidate within five years of the owner's death, or take payments based on life expectancy that must begin within exactly one year of the date of death; a surviving spouse may instead assume ownership of the contract outright. On an IRA or qualified annuity, an eligible designated beneficiary (a spouse, someone not more than 10 years younger than the deceased, a chronically ill or disabled person, or a child of the owner under 21) may take life-expectancy payments, while other designated beneficiaries must empty the account within 10 years and an estate or charity must liquidate within five. Be deliberate on the Claimant's Statement: if you want the money moved into an inherited (beneficiary) account rather than paid out, that is option 5 in the payment-option section at the bottom of page 4, and National Life's inherited-account guidance warns that an accidental death-benefit payout election is not something you can simply take back. Contracts carrying the Guaranteed Lifetime Income Rider cannot be used as the receiving contract for an inherited account.

On the Beneficiary Agreement Request you name the trust itself and fill the trust block: Trust Name, Trust Date, Trust ID # (EIN), Trustees, and Grantor. National Life's General Provisions then treat successor trustees as covered by the designation, keep an amended trust in place as beneficiary, and make payment to the trust a full discharge of the company's liability. The catch is federal, and National Life's inherited-account guidance spells it out: a trust named on a QUALIFIED annuity only gets designated-beneficiary payout treatment if it is a "see-through" trust — valid under state law, irrevocable (or irrevocable by its terms at the account holder's death), with all beneficiaries individuals and identifiable as eligible, and with trust documentation provided to the custodian in a timely manner. A trust that fails those tests is a non-designated beneficiary, and the account must be fully liquidated within five years.