Who is the individual that receives payments from an annuity?

The individual who receives payments from an annuity is known as the annuitant. This person is the one who is covered by the annuity contract and for whom the payouts are calculated. Payments are typically distributed to the annuitant after a specified period, which may be either immediately after the purchase of the annuity or after a certain accumulation phase.

The role of the annuitant is crucial, as the terms of the annuity, including the amount and frequency of payments, are based on the life expectancy and other factors relating to the annuitant. The annuitant may or may not be the same person as the owner of the annuity; the owner has control over the annuity and can change beneficiaries or liquidate the annuity if necessary.

In contrast, the annuity owner is the person who holds the contract and is responsible for making premium payments. The agent refers to the person selling the annuity, while the beneficiary is the individual designated to receive benefits from the contract in the event of the owner's death, but they do not receive payments from the annuity itself. Understanding these distinctions clarifies the specific roles associated with an annuity and underscores why the annuitant is the correct answer in this context.