CARD T156
Annuity Owner
The person or entity controlling the contract’s ownership rights. The owner and annuitant need not be the same person.
How it works
The annuity owner exercises rights such as permitted withdrawals, beneficiary changes, and payout elections. The annuitant supplies the measured life for life-contingent benefits. Ownership also matters for taxation, including special rules for contracts held by nonnatural persons. Distinguish the owner’s death provisions from payout terms rather than assuming only the annuitant’s death matters. [1] [2]
Pat owns a contract on Sam’s measured life. Pat normally controls a permitted beneficiary change even though Sam is annuitant.
Control of the contract does not automatically belong to the annuitant or beneficiary.
CARD T157
Payout Phase
The stage when annuity income payments are made. It follows accumulation in a deferred annuity that is annuitized.
How it works
The payout phase is when annuity income is paid under the elected arrangement. An immediate annuity reaches this phase quickly; a deferred annuity can reach it after accumulation. Payments may be fixed or variable and may depend on one life, two lives, or a stated period. Payout does not necessarily mean the entire payment is taxable. [1] [2]
After annuitization, an insurer pays $800 monthly under the selected option. That contract is in its payout phase.
Phase describes when income is paid; the payout option determines duration and guarantees.
APPLY THE TERMS
Practice questions
Select an answer, then check it to see why each option is right or wrong.
T156 · Annuity Owner
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T157 · Payout Phase
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Sources & further reading
Original explanations and practice scenarios informed by the following regulatory, legal, and product resources. State examples are not presented as nationwide deadlines or requirements.