What is an Annuitant?

The person who receives the benefits of an annuity is referred to as an annuitant. The annuitant can be the annuity contract holder or another person to whom the title has been designated.

Several characteristics of the annuitant play an important role. Two of the major ones are the age of the annuitant and the sex of the annuitant. Both have an effect on the way the annuity contract operates.

For example, an annuity can be used for a lifetime payout. Since life expectancy statistics are usually used by insurance companies in order to determine the amount of every payment the age of the annuitant will have an effect on payment amounts.

The amount of the payment will be smaller, the younger the annuitant is. The major reason for this is that larger payments last for shorter time than payments of a smaller amount. Additionally, since men are believed to have shorter lifespan than women, insurance companies will prepare different budgets for women and men. The insurance company again uses the statistics in order to limit its risk exposure and guarantee the continuing of the payments.

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