In an annuity contract, who receives the remaining payments if the life insured dies before all scheduled payments have been made?

• A. Beneficiary
• B. Annuity Grantee
• C. Insurer
• D. Annuitant

Answer: (B)

The key idea is who is designated to receive any remaining installments when the life on which the annuity is based dies early. In an annuity contract, the person whose life determines the payouts is the annuitant. If the annuitant dies before all scheduled payments are made, the contract can designate someone to receive the remaining payments—the annuity grantee. The insurer isn’t a recipient of future installments, and the beneficiary concept in life insurance isn’t the same mechanism for annuity payments. The annuitant wouldn’t continue to receive payments after death unless a specific guarantee option exists; when there is a designated annuity grantee, that person is entitled to those remaining payments.