What Happens If I Die Before I Begin To Receive Payments From My Annuity? In the unfortunate event of the contract owner’s death before income payments begin, the beneficiary may receive a death benefit from the annuity. In some contracts, the death benefit will be based on the account value. Other contracts use the surrender value or other applicable contract value to calculate the death benefit. What if you have a spouse? Does he or she have inherent rights? If your spouse is the surviving joint owner or sole beneficiary, then he/she may have the ownership rights with all rights and privileges of the original owner, as allowed by IRS regulations.