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 post 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 3 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.
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