PSI Ohio Insurance Practice Exam

What is the term for the person who receives the benefit of an annuity?

1. Beneficiary

2. Annuitant

3. Owner

4. Claimant

The correct answer is: Annuitant

The term for the person who receives the benefit of an annuity is "annuitant." This refers specifically to the individual who is entitled to receive the annuity payments, typically for a specified period or for the rest of their life after a specified date or event. The annuitant is usually the one whose life expectancy is taken into account when calculating the annuity payments, as this helps in determining the amount and frequency of those payments. While the other terms may seem relevant, they have distinct meanings. The beneficiary is a person designated to receive benefits from a financial product after the death of the owner, but that doesn't apply to annuity benefits during the annuitant's lifetime. The owner might refer to the individual who purchased the annuity and retains administrative control or rights associated with the contract. The claimant is typically someone who seeks to claim benefits from an insurance policy or other financial instrument; however, this term does not specifically relate to annuities. Therefore, "annuitant" rightly captures the essence of who benefits from annuity arrangements.