Final answer:
If an annuitant with a cash-value life insurance policy dies before the full account balance is paid, the remaining funds are handled according to the policy terms or state intestacy laws, not automatically donated to charity.
Step-by-step explanation:
In the context of cash-value (whole) life insurance, which features both a death benefit and a cash value component, the outcome when an annuitant passes away before the entire account balance has been paid out can vary. This accumulated cash value can be utilized by the policyholder during their lifetime. However, in the situation described where a fixed amount has been specified and the annuitant dies before the full amount is distributed, the remaining balance is typically not donated to charity by default. Instead, it is subject to the terms specified within the insurance policy or annuity contract. Upon the annuitant's death, the remaining funds may be paid out to the beneficiaries or the estate as determined by the policy or any applicable riders attached to the contract.
Moreover, if an individual dies intestate, or without a will, the state intestacy laws will determine the distribution of assets, which may not include provisions for donations to charity unless explicitly mentioned in a will or similar legal document. Therefore, for payments to be donated to a charity of the annuitant's choice, it would need to be part of the contract's stipulations or declared in a valid will.