Who is defined as an annuitant?

An annuitant is defined as the individual who receives the benefits from an annuity contract. This individual is the one on whose life the annuity is based, and their life expectancy often determines the payout structure of the annuity. When an annuity is purchased, the annuitant may not necessarily be the same as the person who makes the premium payments, as there could be a different owner of the policy and someone else designated to receive the benefits.

The benefits that the annuitant receives can come in various forms, such as a lump sum or regular payments over a specified period or the remainder of their lifetime. This role is central to the functioning of annuities since they are designed primarily to provide income to the annuitant. Understanding this definition helps in comprehending the purpose of annuities in retirement planning and investment strategies.