Annuities
A conventional annuity is the simplest and most popular
method of converting a pension contract into an
income. It is very simple product, and the basics are
relatively easy to understand: - in simple terms you hand
over the proceeds of your pension fund to an insurance
company, and they provide you with an income for life
(annuity).
The income you receive is guaranteed (unless
you opt for an
investment linked annuity), and will be at least payable
until the day you die. Under current rules you can buy an
annuity from age 50, but in 2010 this minimum limit will
rise to age 55.
How much income your annuity
provides is based on your
age and whether you're a man or a woman, and the
annuity options you select
(see below for more details). The general rule of thumb is
that a man will receive a bigger annuity than a woman, as
a male's life expectancy is shorter. However females tend to
live longer, so a woman should receive the annuity payments for longer.
When you take the benefits from your pension
there are a number of
annuity options available, and this is perhaps where an
annuity starts to get complicated. You have options such as
including inflation proofing, so your income will increase
each year, often called an escalating annuity, or building in a spouse's pension so that in the
event of your death the income continues for your spouse, or
choosing a guarantee period so that it is guaranteed for a
minimum period of time. The more of these "whistles and
bells" you include the lower the level of income from
the annuity.
Click here to find out more
about these annuity options.
Different insurance companies have different
views on life expectancy, and the types of business they
want to attract. So the annuity rates they offer can vary
widely from one company to another. So it always pays to
shop around for the best annuity deal for your
circumstances, and this is called the "Open
Market Option". Your pension company will probably offer
you an annuity, but in most instances this can be bettered by
shopping around.
If you are shopping around for an annuity it
is important to remember that there are some companies that
base the annuity rate they will offer on an individuals own medical circumstances and life expectancy. So if
you have, or have had in the past, problems with your health
then it is worth looking at
enhanced/impaired life annuities or
smoker annuities if you smoke. Please note
enhanced/impaired life annuities don't just apply to serious
conditions such as cancer or heart problems. Even relatively
minor conditions (especially if there is more than one) can
qualify you for an enhanced annuity. Follow the links to
find out more about
enhanced/impaired life annuities or
smoker annuities.
If you are considering taking
out an annuity, then call now to speak to an independent
pension specialist on 0800 011 2713 , without obligation or
contact us online, or request
an annuity quote.
We're totally
independent, you can be sure that you will get best annuity
from the most suitable provider.
Don't take any
chances with your annuity, you only have one chance to get it
right,
talk
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Contact us now online or call 0800 011 2713 , without obligation.
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