Owner vs. Annuitant in Annuity Contract

Many people are confused between the owner vs. the annuitant in an annuity contract. Before you purchase an annuity, you should know all the different parties (people) involved in the annuity contract. If you do not know, you may end up believing that you will get your money in the end and won't. You should know the rules before you buy the annuity.

Are the owner and the annuitant the same person in an annuity contract?

The owner of an annuity is not necessarily the same person as the annuitant in the annuity contract.

What is the annuitant?

In an annuity contract, the annuitant is the person whose life the duration of the annuity payments is based on.

Does the annuitant receive the annuity payment?

The annuitant, in an annuity contract, is usually the person whom receives the annuity payments BUT not always. Sometimes, the person receiving the annuity payments is not the annuitant. So, make sure you know who is going to be receiving the annuity payments before you sign for the annuity contract.

This concept of an annuity may sound strange but you can buy an annuity and have the annuity payments be calculated based on someone else's life (the annuitant).

How often are the annuity payments?

Depending on the annuity contract, the annuity payments may be on an:

• annual basis,
• semiannual basis,
• quarterly basis or
• monthly basis.

However, usually annuity payments are monthly payments.