The Truths of an Annuity Owner

Shawn Plummer

CEO, The Annuity Expert

If you are a recent annuity owner or even a long-time annuity owner, you might be wondering what all of the benefits and drawbacks of owning one really are. In this guide, we will discuss the truths about an annuity owner from someone who has been in your shoes before. I am going to cover everything from the positives to the negatives that come with having an annuity for your retirement funds.

Who Is The Annuity Owner?

The annuity contract owner is the person who owns the contract, pays the premiums, and has various rights, including the power to choose a beneficiary to receive any survivor payments.

The owner may take money out of the contract at any time and give it to someone else, sell it, or surrender it.

The owner can be an annuitant as well. The contract owner is the person who is entitled to receive income benefits throughout the annuitization period, being the annuitant.

What Can The Annuity Owner Do?

Owners of annuity contracts have the following rights, regardless of whether the contract is owner-driven or annuitant-driven and regardless of its complexity:

  • During the accumulation period, you have the right to name and alter the beneficiary.
  • The right to select the annuity starting date and the settlement option under which periodic payments are made once you’re retired.
  • The right to any declared dividends by an insurer
  • The right to withdraw funds and, if loans are authorized, borrowed cash values
  • Except in the case of qualified annuities, you must have the right to pledge the contract as collateral for a loan.
  • The right to give up or transfer the contract
  • the right to exchange a nonqualified annuity contract for another nonqualified annuity, tax-free, under IRC 1035 
  • The annuitant is also chosen by the contract owner. While the contract owner does not have to be the annuitant, in most cases he or she is.

Who Can Be Named As The Annuity Owner?

When we explain that the contract owner is the individual who owns the agreement, it’s crucial to note that the owner can be a natural person or a non-natural entity. An annuity contract owner can be an individual or a:

  • corporation
  • qualified plan (IRA)
  • employer
  • trust 

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Frequently Asked Questions

Who is the annuity owner?

The annuity owner is the person who purchased the annuity and is typically the person who will receive payments from the annuity. The owner can name a beneficiary, which is the person who will receive payments from the annuity after the death of the owner.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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