Annuitant

What Is an Annuitant?

An annuitant is the individual on whose life an annuity contract is based. The insurance company uses the annuitant's age and expected lifespan to set the size and timing of payments. In many contracts, the annuitant is also the person who receives the income. However, the roles can be separated. For example, one person may own the contract while another person serves as the annuitant.

How the Annuitant Affects Payments

Because payments are often tied to the annuitant's lifetime, the annuitant's age when payments begin influences the amount. Insurers generally rely on mortality tables to estimate how long payments are likely to last. Consider a contract that pays income for the annuitant's life. The insurer expects to pay for a period based on the annuitant's age, and payments usually stop at the annuitant's death unless the contract includes other features.

Some contracts add protections that continue payments after the annuitant dies. A period certain guarantees payments for a set number of years, even if the annuitant dies earlier. A survivor benefit may continue income to another person. Each feature changes the cost and the payment amount, so the contract language matters.

Annuitant and Beneficiary

The annuitant is different from a beneficiary. The beneficiary is the person named to receive any remaining benefits when the contract ends, typically after the annuitant dies. Some contracts name a joint annuitant, whose life also determines payments. This arrangement is often used so that income can continue for a surviving spouse.

Key Points for Investors

• The annuitant's life, rather than the owner's, usually determines how long lifetime payments last.
• The annuitant's age can affect the payment amount.
• Some contracts restrict whether the annuitant can be changed.
• Contract terms vary, so the policy document is the authoritative source.