What Is an Annuitant?

An annuitant is a person who receives the income benefits of an annuity. The annuitant's life expectancy determines when the annuity payout occurs. Annuitants can also be the annuity owner or contract holder. After the death of the annuitant, a beneficiary receives the remaining payout.

Christian Simmons, writer and researcher for RetireGuide
  • Written by
    Christian Simmons

    Christian Simmons

    Financial Writer

    Christian Simmons is a writer for RetireGuide and a member of the Association for Financial Counseling & Planning Education (AFCPE®). He covers Medicare and important retirement topics. Christian is a former winner of a Florida Society of News Editors journalism contest and has written professionally since 2016.

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    Lee Williams
    Lee Williams, senior editor for RetireGuide.com

    Lee Williams

    Senior Financial Editor

    Lee Williams is a professional writer, editor and content strategist with 10 years of professional experience working for global and nationally recognized brands. He has contributed to Forbes, The Huffington Post, SUCCESS Magazine, AskMen.com, Electric Literature and The Wall Street Journal. His career also includes ghostwriting for Fortune 500 CEOs and published authors.

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    Ebony J. Howard, CPA
    Ebony J. Howard, CPA

    Ebony J. Howard, CPA

    Credentialed Tax Expert at Intuit

    Ebony J. Howard is a certified public accountant and freelance consultant with a background in accounting, personal finance, and income tax planning and preparation.  She specializes in analyzing financial information in the health care, banking and real estate sectors.

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  • Published: July 12, 2021
  • Updated: August 17, 2022
  • 3 min read time
  • This page features 5 Cited Research Articles
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How to Cite RetireGuide.com's Article

APA Simmons, C. (2022, August 17). What Is an Annuitant? RetireGuide.com. Retrieved September 25, 2022, from https://www.retireguide.com/annuities/annuitant/

MLA Simmons, Christian. "What Is an Annuitant?" RetireGuide.com, 17 Aug 2022, https://www.retireguide.com/annuities/annuitant/.

Chicago Simmons, Christian. "What Is an Annuitant?" RetireGuide.com. Last modified August 17, 2022. https://www.retireguide.com/annuities/annuitant/.

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Difference Between Annuitant and Owner or Contract Holder

An annuitant and a contract owner or holder can be the same person. The owner is responsible for determining the terms of the contract for the annuity, like who will be the beneficiary and when payments will begin.

The owner or holder is in control of the annuity and is the only one who can make changes to its structure or who will serve as a beneficiary.

Whether they are also the contract owner or not, the annuitant is the person whose lifespan the annuity is based. This arrangement can also be referred to as the measuring life and cannot be changed.

Suppose an annuitant is not the contract holder or owner. In that case, they lack authorization to make changes to the beneficiaries or withdraw or add funds.

The annuitant also must be a person and not a company or group.

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Difference Between Annuitant and Beneficiary

While an annuitant and contract owner or holder can be the same person, an annuitant cannot also be the beneficiary.

Beneficiariesinherit the remaining payout of the annuity when the annuitant or measuring life dies.

Annuities have several payout options. You can take the remaining funds in a lump sum distribution or annuitize the distribution over five years.

While you will receive a significant amount of money at once with a lump sum, this also can mean more taxes.
Receiving the payout over five years means you will get money in smaller increments. Also, you will not be responsible for a sizeable amount in taxes at once.

Regardless of which option you choose, the annuity distributes within five years of the annuitant’s death.

For non-spousal beneficiaries, your relationship to the annuitant will change how you receive payouts and over what amount of time.

The lump-sum and five-year payout options are available if you are a spouse and beneficiary. In addition, you also have the option to become the annuity owner after the annuitant’s death.

You could also consider a joint and survivor annuity. In that setup, the payout of the annuity will last for the duration of your life and one other person, like a spouse.

You both serve as annuitants from the start and can receive regular annuity payments and tax-deferred benefits.

Frequently Asked Questions About Annuitants

What happens if the annuitant dies?
The owner of the annuity contract should work with their insurance company to specify payout and beneficiary options. After the annuitant dies, the insurance company distributes any remaining payments to beneficiaries. Adding a beneficiary to the annuity's contract terms blocks financial institutions from being able to seize accumulated assets that aren't surrendered when the owner dies.
What is a joint annuitant?

A jointly owned annuity is a contract that includes two owners. When two people jointly own an annuity with a death benefit, the death benefit is triggered upon the death of one of the owners.

Jointly owned annuities work differently than joint and survivor annuities. When the annuitant of a joint and survivor annuity passes away, payments continue for the remainder of the beneficiary's life.

Can a trust be an annuitant?
Only a person can serve as an annuitant. A trust cannot serve as an annuitant because annuity payouts are based on life expectancy. However, a trust can own the policy and be listed as a beneficiary. It's important to consider that any payments going to a trust must be paid out within five years.
Last Modified: August 17, 2022

5 Cited Research Articles

  1. Lake, R. (2020, January 8). What Happens to an Annuity When You Die? Retrieved from https://finance.yahoo.com/news/happens-annuity-die-234955255.html
  2. Internal Revenue Service. (2020). Pension and Annuity Income. Retrieved from https://www.irs.gov/pub/irs-pdf/p575.pdf
  3. Internal Revenue Service. (n.d.). Annuities – a Brief Description. Retrieved from https://www.irs.gov/retirement-plans/annuities-a-brief-description
  4. Society for Annuity Facts and Education. (n.d.). Glossary. Retrieved from https://www.safeannuityeducation.org/about-annuities/common-annuity-related-terms/
  5. Bouman Law Firm. (n.d.). What You Should Know About Annuities after the Owner’s Death. Retrieved from https://www.tomboumanlaw.com/annuities.html