When it comes to securing steady income in retirement, annuities are a popular choice. But they can also serve a broader purpose: helping ensure support for spouses or other loved ones after you’re gone. 

Some annuity contracts include a contingent annuitant — a person designated to receive any remaining annuity payments after the primary annuitant's death. Understanding the contingent annuity meaning can be key to structuring an annuity for long-term protection.

In this article, we’ll explain how contingent annuitants work and differ from primary annuitants and beneficiaries. We’ll also explore what to consider when choosing the right structure for your legacy goals. 

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What is a contingent annuitant?

A contingent annuitant is someone designated to receive any remaining annuity payments if the primary annuitant — the person who originally receives payments — passes away. They continue to receive regular annuity payments, often for their lifetime, depending on the terms in the annuity contract.

Once payments start, the contingent annuitant designation locks in and typically can’t be changed. Some annuity contracts, like joint-and-survivor annuities, allow for a contingent annuitant who receives payments during the primary annuitant’s lifetime. This “live contingent” aspect differs from standard contingent annuitants, where payments only begin once the primary annuitant dies. 

How does a contingent annuitant work?

The role of a contingent annuitant depends on the type of annuity contract, such as a fixed, variable, or contingent deferred annuity. Upon the primary annuitant’s death, the insurer transfers payments to the contingent annuitant. 

In contingent deferred annuities, once the primary annuitant dies, the insurance company may determine payments to the contingent annuitant based on their life expectancy. If they’re younger, the provider may factor in a longer payout period, so payments are typically lower than what the primary annuitant received.

Always review the terms of any annuity contract. This includes when payments will begin for the contingent annuitant, how much the payments will be, and how long payments will last. 

Who is the annuitant, and how does it differ?

The annuitant is the person who the annuity provides payments to. Their life expectancy can determine the annuity’s payout schedule. They receive regular payments once the contract enters the payout phase. 

Joint annuitants are co-recipients of annuity payments. They receive regular payments alongside the primary annuitant when both are alive. When one passes, the surviving annuitant continues to receive a percentage of the original payment. 

Contingent annuitants only receive payments after the primary annuitant passes. The amount received is often a reduced percentage to account for longer life expectancies. 

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Contingent annuitant vs. beneficiary 

Understanding the difference between contingent annuitants and beneficiaries is key to planning how annuity income is passed on.

Contingent annuitants receive ongoing annuity payments after the primary annuitant’s death, typically as part of a structured income stream. Beneficiaries, on the other hand, usually receive a lump-sum payment representing the remaining value left in an annuity as a death benefit. Alternatively beneficiaries may receive the remaining payments based on the contract terms.   

Some contracts allow for contingent beneficiaries. This means the primary annuitant can designate a second beneficiary to receive any death benefits if the primary beneficiary is unwilling or unable to claim the funds. 

Joint annuitant vs. contingent annuitant

Joint-and-survivor annuities, often used by spouses, allow two annuitants to receive payments during their lifetimes. When one dies, the surviving annuitant continues to receive a percentage of the original amount — with common options being 100%, 75%, or 50% of the original amount. 

The payments typically decrease in value for the surviving spouse to reflect a longer payout period. For example, a contract might pay both spouses $2,000 a month in total and reduce it to $1,500 for the remainder of the surviving spouse’s life when one passes. 

This differs from a contingent annuitant arrangement, where the secondary annuitant only receives payments after the primary annuitant's death. The payments often decrease in value for contingent annuitants. For example, an annuity contract might pay $3,000 monthly to the primary annuitant, while the contingent annuitant may only receive $1,500 after the primary passes away. 

Explore your annuity options with Gainbridge

Understanding the differences between contingent annuitants, joint annuitants, and beneficiaries helps to ensure your annuity can support both your retirement and legacy goals. 

Gainbridge offers straightforward annuity products designed to deliver reliable income — with no hidden fees or commissions. Explore Gainbridge today and discover how our suite of products and services can help you secure a steady income in retirement for you and your loved ones.

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This article is intended for informational purposes only. It is not intended to provide, and should not be interpreted as, individualized investment, legal, or tax advice. For advice concerning your own situation please contact the appropriate professional. The GainbridgeⓇ digital platform provides informational and educational resources intended only for self-directed purposes. Guarantees are backed by the financial strength and claims-paying ability of the issuer.

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