Annuities✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
A corporation purchases an annuity with a single premium, names its CEO as the annuitant, and designates the CEO's spouse as beneficiary to receive any unpaid benefits if the CEO dies before the payments are completed. The party entitled to choose the settlement option, change the beneficiary, and exercise the other rights of ownership is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The owner is the party that purchases the contract, pays the premium, and holds all of the contractual rights - including choosing the settlement option and naming the beneficiary. Here the corporation is the owner. The CEO is the annuitant, whose life simply measures the income payments, and the spouse is the beneficiary, who would receive only any unpaid benefits on the CEO's death. In corporate-owned or business-funded annuities the owner is frequently a business entity rather than the individual whose life measures the payments.
Why the other options are wrong
- B) The CEO is the annuitant, not the owner; the CEO's lifespan determines the payout period, but the CEO holds no contract rights unless also named as owner.
- C) The spouse, as beneficiary, has rights only to any unpaid benefits after the annuitant's death and no ownership interest while the contract is in force.
- D) The insurer is the party that promises the payments; it issues and owes on the contract but never owns the contracts it issues.
Memory hook
Whoever signs, funds, and steers is the owner — in this case the corporation, not the named lives.