Annuities are constant stream of income over a predefined period of time. So, if annuity passes away at a point of time when the total annuity paid will be less than total annuity has to be made then balance will be paid to the beneficiary by the insurance company.
A person buys an annuity for $ 200000. After receiving $120000 in annuity payments he dies. So his beneficiary would receive the balance amount (i.e. $ 80000) from the insurance company. So the beneficiary would receive a lump sum.