Annuity Plan: Benefits

The Annuity Plan is set up to secure the desired income stream. Below are examples of typical annuity options. 

Annuity payable for life 

The annuity is payable until the policyholder dies. No payments are made after death irrespective of whether the policyholder lives for only one month after selecting the annuity or until the age of 100!

Annuity payable for life, but guaranteed for 10 years (for example)

The annuity is payable for 10 years irrespective of whether the policyholder dies or not. If alive after the 10 years, the annuity continues until after death.

Annuity payable for life but for a maximum period of 5 years (for example)

No payments are made after the 5 year period has elapsed or after the death of the policyholder, if sooner. 

Guaranteed Annuity payable for 10 years (for example)

The annuity is payable for 10 years irrespective of whether the policyholder is dead or alive. The annuity will not be payable after the expiry of the 10 year period even if the policyholder is still alive.
 
Last Survivor Annuity reducing to 50% (for example) on first death

The annuity is payable at the full rate whilst the policyholder and specified dependant are both alive. On the death of the first life, the annuity is reduced by 50%. The reduced annuity continues to be paid until the death of the second life.

Last Survivor Annuity guaranteed for 10 years (for example)

The annuity is payable for 10 years irrespective of whether the policyholder and/or the specified dependant are alive on the annuity payment dates. If either or both remain alive after 10 years the annuity continues to be paid until the death of the second life.

Annuity payable for life and on death at 50% annuity to the spouse (for example)

The full annuity is payable until the policyholder dies. The annuity continues at half this rate in favour of the spouse providing they survive the policyholder. This is payable until the death of the spouse.

Examples of deferred annuity are similar to the options above. However, before a deferred period expires, the ‘options on death’ must have been dealt with.

Typically:

• The premium is refunded on death prior to the annuity starting.
• The premium is not refunded on death prior to the annuity starting.
• The Plan pays a death benefit – a lump sum or pension to the specified dependant/children.