Every IVIC has three defined roles. Exam questions regularly test whether you can distinguish them.
Contract owner (policyholder) -- The person who signs the application, pays the premiums/deposits, and owns the contractual rights. The owner names beneficiaries, directs investments, and is responsible for income tax on allocations in a non-registered contract. The owner may or may not be the annuitant.
Annuitant -- The person whose life the contract is based on. The maturity date and the death benefit trigger are both tied to the annuitant's life. Specifically:
- The maturity guarantee is paid on the maturity date, which is typically set by contract at a fixed calendar date or when the annuitant reaches a specified age (often 100 or 105).
- The death benefit is paid when the annuitant dies before the maturity date.
In many contracts the owner and annuitant are the same person. They can be different: for example, a corporation might own a contract with an individual as the annuitant.
Beneficiary -- The person (or entity) who receives the death benefit when the annuitant dies. Naming a person (rather than the estate) lets the proceeds bypass the estate entirely, avoiding probate. The choice of beneficiary also affects creditor protection (covered in the guarantees module).
Exam trap: The death benefit is triggered by the death of the annuitant, not the owner. If owner and annuitant are different people, the owner's death does not trigger the death benefit.