"Under the Spousal Continuation Rule [IRC 72(s)], offered by some, but not all, insurance companies, an annuity owner's surviving spouse can become the owner when the spouse dies. He or she can continue the contract with its tax-deferral, without having to take a distribution of the funds. When someone other than a spouse is the beneficiary along with the spouse, the surviving spouse does not become the contract owner. Where a child and spouse are primary beneficiaries, some companies will allow spousal continuation, but only on the spouse's remaining portion of the contract."

Source: Annuity Investing And Proper Contract Structuring Considerations by Paul M. League, CFP Financial Services Journal, March 2001