Annuitant vs. beneficiary, what’s the difference? This is a question many people are asking themselves and a topic discussed in the annuity community for years. This guide will discuss some critical differences between annuitants and beneficiaries to help determine which one you should be!
The Annuity Contract Setup
An annuity is a contract between a consumer and an insurance company. The annuity contract has three designated representatives of the contract:
- The contract owner
- The annuitant
- The beneficiary
What is an Annuitant?
An annuity is an insurance policy for retirement.
An annuitant is a person whose life expectancy is used to calculate annuity payments. The annuitant receives benefits or annuity payments from an annuity contract with an insurance company.
Most of the time, the annuitant is also the contract owner, but they can be different. For example, the contract owner, such as the beneficiaries, decides about the annuity. If the annuitant is different from the contract owner, the annuitant can not decide about the annuity contract.
What is a Beneficiary?
The beneficiary is the person who received the annuity’s death benefit. Naming one or more beneficiaries other than the estate is vital because, without a beneficiary, the money in the annuity could be subject to probate.
Consider life insurance
Is it a top priority for you to leave money to your beneficiaries? If this is the case, life insurance may be a better solution. You don’t have to take a medical examination in some situations. Compare life insurance quotes online to see if it’s worth it. Coverage starts at $9.37 per month.
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Next Steps
Annuitants and beneficiaries are essential players in the annuity world but have different roles. If you’re trying to decide which one you should be or want more information on this topic, contact us for a quote. We can help you understand the differences between these two roles and how they might impact your financial future. Thanks for reading!
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Frequently Asked Questions
Does an annuity have a beneficiary?
Yes, an annuity can have a beneficiary who will receive the annuity payments after the annuitant’s death. The process can vary by type of annuity, and the annuitant can set the beneficiary when they purchase the annuity.
What is an annuitant in life insurance?
An annuitant is an individual who receives payments from an insurance company or other financial institution. Annuitants typically receive these payments in exchange for a lump sum premium, although other payment options may be available. In addition, these payments may be for a specific period or life, depending on the type of annuity purchased.
Related Reading
- Annuity Death Benefits for Beneficiaries
- Primary vs. Contingent Beneficiary: What’s the Difference?
- What Happens To A 401K When You Die?
- Inherited Annuities: What Are My Options?
- Annuities that offer a Death Benefit to Beneficiaries
- How To Avoid Paying Taxes On An Inheritance
- The Best Annuity Death Benefits
- What is Spousal Continuance?
- How to Retire on $200,000 Inheritance
*Disclosure: Some of the links in this guide may be affiliate links. I may receive a commission at no cost to you if you purchase a policy. It helps us keep the lights on!