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 of the key differences between annuitants and beneficiaries to help you 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 they have with an insurance company.
Most of the time, the annuitant is also the contract owner, but they can be different. The contract owner makes decisions about the annuity, such as who the beneficiaries are. If the annuitant is different from the contract owner, the annuitant can not make decisions 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 important 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 for you. Coverage starts at $9.37 per month.
Next Steps
Annuitants and beneficiaries are both important players in the annuity world, but they have different roles. If you’re trying to decide which one you should be, or if you just 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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