Understanding annuity roles.
Owner: Controls the contract and makes decisions.
Annuitant: The individual whose life expectancy is used to calculate payments.
Beneficiary: Receives benefits if the annuitant dies before or during payout (depending on contract).
Nominator: Not a recognized annuity role.
What happens during the payout (annuitization) phase.
When an annuity enters the payout phase, the contract is annuitized.
At annuitization, ownership rights are largely surrendered, and the insurer begins making periodic income payments.
Who receives the payments.
Income payments are made to the annuitant, because the payment structure is based on the annuitant’s life expectancy.
The beneficiary receives funds only if the annuitant dies, and only if the contract provides for continued payments.
Why the other options are incorrect.
Owner: May not receive payments unless also the annuitant.
Beneficiary: Receives death benefits, not normal income payments.
Nominator: Not applicable.
Maryland suitability relevance.
Producers must clearly explain the distinction between owner, annuitant, and beneficiary to avoid misunderstanding and suitability issues.
Conclusion.
Annuity income payments are normally payable to the annuitant.
