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In the context of an annuity, if the owner dies during the accumulation stage, the recipient of the largest payout is typically the beneficiary designated by the owner. When an annuity is purchased, the owner can designate a beneficiary who will receive the benefit upon the owner's death. This means that the values accumulated in the annuity prior to the owner's death will pass to the beneficiary, often as a lump-sum payment.

The beneficiary may receive the full account balance, which may include the original premium plus any interest or gains that have been accrued over the accumulation phase. This payout can be significantly larger than what the estate would receive, as it avoids probate processes and goes directly to the designated individual. Thus, having a named beneficiary ensures that the intended person benefits from the annuity in the event of the owner’s death.

While the owner’s estate could also receive funds from the annuity, it is typically not structured to provide the largest payout compared to the direct beneficiary. The insurance company merely administers the annuity and does not receive any payout unless stipulated in specific policy terms, and the original premium amount represents only the initial investment, which generally will not be the total amount passed to the beneficiary in cases where gains were realized during the accumulation stage.