What is the role of the annuitant in an annuity?

The role of the annuitant in an annuity is to receive payments from the annuity. Once an annuity is purchased, the annuitant is typically the individual who will benefit from the periodic payments made by the insurance company. The annuity contract is structured so that the payments are made to the annuitant, which provides a source of income, often during retirement years or for a specific duration.

The annuitant's identification is crucial because the amount and timing of payments, as well as the overall benefits of the annuity, are often linked to their life expectancy. Therefore, the annuitant effectively becomes the central figure in the context of payment disbursements from the annuity, while the insurance company is responsible for making those payments based on the terms outlined in the contract.

Understanding this role is essential for anyone involved in financial planning or the sales of annuities, as it highlights the importance of the annuitant's identity and needs in the design and delivery of annuity products.