In general
If—
(i)#
after the annuity starting date, payments as an annuity under the contract cease by reason of the death of an annuitant, and
(ii)#
as of the date of such cessation, there is unrecovered investment in the contract,
the amount of such unrecovered investment (in excess of any amount specified in subsection (e)(5) which was not included in gross income) shall be allowed as a deduction to the annuitant for his last taxable year.