I have a question about IRA annuities that I think I know the answer to, but would like to know for sure.

One of my clients has an IRA variable annuity that has an accumulation value of around $600k and a death benefit of around $1 million. His wife will have the ability to take over the contract at his death going off of the accumulation value, or she can elect the death benefit and close the contract.

My questions are:

Can she treat the entire death benefit as a spousal IRA assumption? Or is the accumulation value only eligible for spousal assumption?

My assumption is that the full death benefit could be treated as a spousal IRA assumption since the contract is an IRA. The only other thing I was thinking might be possible is that the difference between the death benefit and accumulation value might have to be treated as a one time taxable distribution while the accumulation value would still be eligible for spousal assumption.

If someone has experience with this, please share.