What Is an Annuitant?

An annuitant and a contract owner or holder can be the same person. The owner is responsible for determining the terms of the contract for the annuity, like who will be the beneficiary and when payments will begin.

The owner or holder is in control of the annuity and is the only one who can make changes to its structure, withdraw or add funds or change who will serve as a beneficiary.

Whether they’re the contract owner or not, the annuitant is the person on whose lifespan the annuity is based. This arrangement can also be referred to as the measuring life and cannot be changed.

The annuitant also must be a person and not a company or group.

While an annuitant and contract owner or holder can be the same person, an annuitant can’t also be the beneficiary who will inherit the remaining payout of the annuity when the annuitant or measuring life dies.

Annuities have several payout options. According to Western and Southern Financial Group, beneficiaries can take the remaining funds in a lump sum distribution or annuitize the distribution over five years.

While you will receive a significant amount of money at once with a lump sum, this also can mean more taxes. Receiving the payout over five years means you’ll get money in smaller increments and won’t be responsible for a sizeable amount in taxes at once.

Regardless of which option you choose, the annuity distributes within five years of the annuitant’s death.

For non-spousal beneficiaries, your relationship to the annuitant will change how you receive payouts and over what amount of time.

The lump-sum and five-year payout options are available if you are a spouse and beneficiary. In addition, you also have the option to become the annuity owner after the annuitant’s death.

You could also consider a joint and survivor annuity. In that setup, the payout of the annuity will last for the duration of your life and one other person, like a spouse. You both serve as annuitants from the start and can receive regular annuity payments and tax-deferred benefits.

Editor Ashley Donohoe contributed to this article.