Deferred Annuity Benefits Law and Legal Definition

Deferred Annuity Benefits begin at some specified time after the annuity is purchased. It is the money returned to policyholders from an insurance companys earnings. A partial premium refund is made rather than a taxable distribution, reflecting the difference between the premium charged and actual losses.

Earnings on a deferred annuity account are generally taxed only upon withdrawal, providing the annuity with a tax benefit. This type of annuity also provides a death benefit, so that the beneficiary of the annuity is guaranteed the principal and the investment earnings.