Tom, age 43, is the owner of an annuitant-driven contract, and named himself beneficiary. His younger brother, Edgar, is the annuitant. Six years later, Edgar was killed in a car accident and the annuity's guaranteed death benefit was paid to Tom. Not only does Tom have to pay income tax on the death benefit, but a 10 percent early distribution penalty as well. Why doesn't Edgar's death, which triggered the payout, qualify for the death exception to the 10 percent penalty?

• a. because no exceptions to the 10 percent early distribution penalty apply to annuities
• b. because Edgar was younger than 59 when he died
• c. because the death benefit was triggered by the annuitant's death, not the owner's
• d. because the owner and the annuitant are not spouses