Annuity Beneficiary Considerations
What is an annuity beneficiary?
A beneficiary is a person or entity that receives the value of the annuity or annuitization payments that remain (if any) after the death of the annuitant or owner. The annuitant or owner receives annuitization payments during his or her life (the annuitant provides the measuring life for the payments). The beneficiary(ies) is specifically named in the annuity policy. Only the owner of the annuity has the right to name the beneficiary, and he or she may have the right to change the designated beneficiary at any time during the accumulation period (unless the beneficiary designation is irrevocable). When the owner or annuitant dies, the death benefits pass directly to the beneficiary without having to go through the probate process.
Caution: Some types of annuitization payments end when the annuitant dies and there are no payments available for the beneficiary (e.g., life income annuities). Only certain types of annuitization payments provide for remaining payments that may go to a beneficiary (e.g., life income with term certain annuities).