Who receives income payments from an annuity?

The annuitant is the person who receives income payments from an annuity. This individual has typically invested in the annuity and is often the same person who will benefit from the periodic payments as specified in the annuity contract.

When an annuity is established, the contract outlines the terms under which payments will be made, including the schedule and amount of these income distributions. The purpose of the annuity is to provide a reliable income stream, often during retirement, which is why the annuitant, who is the designated recipient of these funds, plays a central role in this financial instrument.

This contrasts with other roles such as the beneficiary, who may receive benefits upon the death of the annuitant but does not receive income payments during the annuitant's lifetime. The insurer is responsible for managing the annuity and making the payments but is not a recipient of those payments. The policyholder might be the annuitant, but not necessarily; if they are different, only the annuitant will receive the payments. Thus, the annuitant is clearly recognized as the one who benefits directly from the income generated by the annuity contract.