How an Annuity is Structured
In general, there are three parties to an annuity (plus the insurance company): the owner, the annuitant and the beneficiary.
The owner controls incidents of ownership in an annuity. They have the right to the cash surrender value. They can also name the beneficiary, assign the policy, and make withdrawals. Oftentimes, the owner is also the annuitant. The owner may be an individual or a trust.
Most importantly, the owner is the person (or trust) who receives the tax benefit of the annuity during the accumulation phase of the contract. (The accumulation phase is the period of time that the annuity is growing; the income phase is the period of time when you are taking money out of your annuity.) The owner does not pay taxes on the income earned (the tax-deferral), however, owners do pay the taxes on withdrawals made during the accumulation phase. The owner is normally the person who receives the payments during the income phase, but he can also assign these payments to the annuitant.
The annuitant is the person on whose life the terms (depending on the particular annuity, it could be their age, gender or state of residence) of the annuity are measured. Again, the annuitant may also be the owner. As in other life insurance policies, the beneficiary is the recipient of the death benefit, should it be paid out.