Which of the following is NOT true regarding the annuitant in accounting?

• A. Annuity payments typically cease upon the death of the annuitant.
• B. The annuitant is always the same person as the beneficiary of the annuity.
• C. The annuitant is the individual whose life expectancy determines the duration of annuity payments.
• D. The annuitant may not necessarily be the owner of the annuity contract.

Answer: (B)

Verified step by step guidance

1. Understand the concept of an annuitant: An annuitant is the individual whose life expectancy is used to determine the duration of annuity payments. This means the payments are tied to the lifespan of this person.
2. Clarify the relationship between the annuitant and the beneficiary: The annuitant and the beneficiary are not always the same person. The beneficiary is the person who receives the remaining benefits of the annuity if the annuitant passes away, but they are distinct roles.
3. Examine the ownership of the annuity contract: The annuitant may not necessarily be the owner of the annuity contract. The owner is the person who purchases the annuity and has control over it, but they can designate someone else as the annuitant.
4. Review the cessation of annuity payments: Annuity payments typically cease upon the death of the annuitant, unless there are specific provisions in the contract, such as a guaranteed payment period or a joint annuity.
5. Identify the statement that is NOT true: Based on the above clarifications, the statement 'The annuitant is always the same person as the beneficiary of the annuity' is NOT true, as these roles can be assigned to different individuals.