Contingent Annuitant

A contingent annuitant is an individual designated to receive annuity payments if the primary annuitant (the original recipient) passes away before the payments are fully distributed. This ensures that the annuity benefits continue to be paid out to another person, thus providing an additional layer of financial security.

Examples:

• If John is the primary annuitant and names his daughter Sarah as the contingent annuitant, Sarah will receive the payments if John dies before the annuity term ends.
• A couple might name each other as primary and contingent annuitants. If one spouse dies, the other continues to receive the annuity payments.

Cases:

• In the case of a retirement annuity, if the retiree (primary annuitant) passes away, the designated contingent annuitant may start receiving the payments immediately or after a certain period, depending on the annuity contract terms.
• If a business purchases an annuity for a key employee, they may name a contingent annuitant, such as a spouse or child, to ensure that benefits are transferred in the event of the employee’s death.