Sustainable income and a death benefit – can a guaranteed annuity offer both?

15 September 2016
Five percent. This is the maximum recommended drawdown rate on a living annuity, if the income is to last the rest of the annuitant’s lifetime.

Many of your clients would protest that 5% yields an amount too small to live on comfortably. Wouldn’t it be nice to offer them more?

If the monthly income given by Just Retirement’s Enhanced With-Profit Annuity was equated to a drawdown rate, your client would get more than 5%, as the table below shows:

  • This income is guaranteed for life.
  • It can never decrease no matter how long your client lives or what happens in investment markets.
  • The income is expected to increase with inflation each year.
  • Money back (original purchase sum) on death* if guarantee period in table is chosen.
What the guarantee period means for your client
Meet William, age 65. William is a single male who purchased a Just Retirement Enhanced With-Profit Annuity. He elected a 15-year guarantee period. If William dies in the first year of his annuity, 98% of the value of his purchase sum would become a monthly income or lump sum in the form of a death benefit, which would be paid to his nominated beneficiaries for the remainder of the guarantee period.

If William lives to his full life expectancy, he will receive 150% of the value of his purchase sum over that time. These values are illustrated in the graph below.

Either way, William’s retirement income is well protected.

Consider getting more for your clients with a Just Retirement Enhanced With-Profit Annuity.

Till next time.

*On death of both main member and spouse if joint life annuity.
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