What is an 'Annuitant'

An annuitant is a person who collects the benefits of an annuity or pension. It is the person named in a specialized life insurance contract. The annuitant is the beneficiary of an annuity or pension. An annuitant can be the contract holder or another person. Proceeds of the annuity contract are provided to the beneficiary upon the annuitant's death to shield the beneficiary from a loss of income.


An annuitant is one or more individuals, or a special class of government employee who receives periodic payments for life or during a specified period of an annuity contract. The owner can name one or more annuitants. Some contracts allow the owner to name joint annuitants. An annuitant must be a natural person and cannot be a company or a trust.

The annuitant is the person whose life expectancy and age are used to calculate the annuity payments. For example, if the owner is 65 years old, but the annuitant is his 60-year-old wife, then the insurance company assumes that it must make monthly payments to her for approximately 24 years, which is the life expectancy of a 60-year-old woman. For a married couple, an annuitant is usually the spouse of the annuity owner.

The Role of Annuitants

People can buy annuities for themselves, which designates them as annuitants. They can also be purchased on behalf of other people, such as relatives, friends or employees. An annuitant may also share benefits, such as when a couple purchases an annuity jointly and designate each other as annuitants when the other spouse dies.

They receive a specified amount of money every month as defined in the annuity contract. After annuity payouts begin, if the owner passes away and the annuitant is still living, the beneficiary receives the payments, the premiums paid plus any interest earned. If an annuitant dies during the annuity accumulation period, the beneficiary receives the cash value of the annuity or the total premiums paid whichever is greater.

The owner makes the selections regarding the annuity, such as the amount of money to invest and how the money should be allocated. The owner also designates the beneficiaries. Some annuity companies require the annuitant and the owner to be the same individual. However, most companies specify that the annuitant and the beneficiary cannot be the same person unless the annuitant and the owner are separate people. The annuitant also has the power to transfer ownership of the annuity to another person. The annuitant and the owner can be each other's beneficiary.

Taxation of Annuitant

Usually, the owner is taxed on annuity payments. If the annuitant and the owner and are the same person, the person is taxed. In addition, some contracts state that the annuitant becomes the owner of the contract after the annuity commencement date. In this instance, the owner is liable for any tax on the income-taxable portion of the annuity payments. If an annuitant receives a distribution before age 59 ½, a 10% tax penalty is applied.

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