The person whose life annuity payments are based on
Quick Definition: The annuitant is the person whose life expectancy determines annuity payments and benefits. In most cases, the owner and annuitant are the same person, but they can be different—such as when a parent buys an annuity for income based on a spouse's life.
1. Owner: Controls the contract, makes decisions, can change beneficiaries
2. Annuitant: The measuring life—payments are based on this person's life expectancy
3. Beneficiary: Receives remaining value if annuitant dies before contract ends
Typically all three roles are the same person, but they can be different depending on estate planning goals.
Scenario: Husband (age 68) buys a $300,000 immediate annuity
Owner: Husband (controls contract, pays premium)
Annuitant: Wife (age 65, payments based on her longer life expectancy)
Beneficiary: Their children
Result: Monthly payments are calculated based on wife's age 65 life expectancy, giving slightly lower monthly income but potentially lasting longer. If wife dies, payments stop and beneficiaries receive any remaining value (if period certain option chosen).
1. Payment calculations: Insurance companies use annuitant's age, gender (in some states), and health to calculate payout rates.
2. Life expectancy: Older annuitants get higher monthly payments (shorter expected payout period)
3. Death triggers: When annuitant dies, certain contract provisions activate (death benefits, payment cessation)
4. Joint life options: Can name two annuitants for joint-life payments
Owner rights:
Annuitant role:
In 95% of cases, owner and annuitant are the same person. Separating them is for specific estate planning strategies.
For married couples, you can name two annuitants for joint-life coverage:
Joint and 100% survivor: Full payments continue after first death
Joint and 50-75% survivor: Reduced payments after first death
Joint life only: Payments stop when first person dies (rare)
Joint annuitants reduce initial monthly payment because insurance company expects to pay over two lifetimes instead of one.
During accumulation phase (before annuitization), some contracts allow changing the annuitant. This is uncommon and has tax implications.
After annuitization (income phase), you typically cannot change the annuitant—payments are locked based on original annuitant's life expectancy.
When owner and annuitant are different people, tax treatment can be complex:
Consult a tax professional before separating owner and annuitant roles.
The annuitant is the measuring life for annuity payments. In most cases, you are both the owner and annuitant. Separating these roles is for advanced estate planning and should only be done with professional guidance.