In the context of annuity payments, what is the main difference between the annuitant and the beneficiary?

The distinction between the annuitant and the beneficiary is fundamental in the context of annuity payments. The annuitant is the individual who is receiving the periodic payments from the annuity during their lifetime. Their role is central because the terms of the annuity, such as payment amounts and duration, are based on the annuitant’s life expectancy and age.

On the other hand, the beneficiary is designated by the annuitant or policyholder to receive benefits upon the death of the annuitant. This typically means that any remaining value in the annuity—if the annuitant passes away before the total investment is recouped—would be paid to the beneficiary. This setup ensures that the financial interests of the family or dependents are protected, as benefits can continue even after the annuitant's death.

Understanding this difference clarifies how annuities function in estate planning and financial management. Thus, the correct answer outlines the responsibilities and roles of the annuitant and beneficiary within the annuity contract effectively.