Tag Archives: Annuity

What value would an Annuity bring to you?

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We are living for longer today than ever before. At the same time, the cost of living is ever rising. Changing social and economic factors mean that planning your finances during retirement has become more important than ever before. After all, retirement is known as the golden period, when one should be able to enjoy the fruits of life’s labour. It is therefore vital to plan carefully and optimise your financial assets to provide for you when you stop working. Things like annuity value prove to be immensely significant during retirement, as an annuity is one of the most important, and often the only source of income for pensioners.

An annuity provides a regular and steady income in exchange for a lump sum. People usually invest their pension savings into an annuity scheme, which then pays out an income either for as long as you live, or for a pre-agreed period of time. How much income an annuity can offer you, or Annuity Value, depends on the size of your annuity fund, which is the amount invested in the annuity, as well as various other factors.

The most important factors that determines annuity value is the type of annuity you choose to invest in and the current annuity rates. Other factors include age, gender, and location. Depending on your health and lifestyle, you could also be eligible for an enhanced annuity, which has a higher annuity value based on the shorter than average life expectancy of the applicant.

Often an annuity is the only source of income during retirement, and so choosing the right annuity with sufficient annuity value is extremely important. Once you buy an annuity it cannot be changed or cancelled – so it is important to make the correct decision the first time around. An annuity offers a chance to make the most of your life savings, but choosing an annuity that underperforms or does not suit your needs could mean losing your life savings to an ineffective investment.

It is imperative to shop around and use the open market option to find the most suitable annuity with a sufficient annuity value. You can consult an independent financial advisor with expertise in the retirement sector to understand the implications of investing in different types of annuities and choosing the best option. You can also use online tools like annuity calculators etc. to find out the best annuity value you could get in exchange for your annuity fund.

Create Your Own Bespoke Annuity

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An annuity is a way to turn pension savings into regular usable income for the rest of your life, or for a pre agreed period of time. Usually, an annuity is bought with a lump sum from the pension pot, and the size of the lump sum will determine how much income you could get back from the annuity. But annuity income also depends on a number of other factors including age, gender, location, health, the kind of annuity you choose, and of course current annuity rates.

Your pension provider is obligated to make an annuity offer to you; however, you have the right to explore the open market before making a choice. This is known as the open market option and your pension provider is required to make you aware of this path. Shopping around for an Annuity can help you understand the various types of annuities that are available from a multitude of annuity providers.

For instance, there are fixed annuities that pay a fixed income for the entire term of the annuity, and variable annuities such as escalating or investment linked annuities where the income you receive from the annuity varies over time due to several external factors. While a fixed, stable, guaranteed income may work for some people, others may like to have income that is linked to inflation or income that is linked to an external investment product.

An annuity once purchased cannot be changed or cancelled so it is vital to shop around and find an annuity that is the best match for your individual circumstances and needs. It is also important to be aware that many annuities have additional bells and whistles that can be added to the product. For instance, some annuities have the option of adding features whereby your income will continue to be paid to your partner or beneficiaries for a certain fixed period even after you are gone.

You could protect your income from being eroded by inflation by adding an escalating feature, where the annuity payments increase by a certain percentage each year or by investing in an inflation linked annuity, where the payments depend on the Retail Price Index. Naturally, adding extra bells and whistles such as these will generally impact payments in the initial stage – so that, for example, an escalating annuity will pay less than a conventional level annuity at the start of the annuity.

It is important to understand the details of how the annuity works before investing. The key to getting the perfect annuity is to use different tools and options to make the annuity work for you, and to strike the right balance between the level of income you need immediately, and the level of income you would ideally like to receive in the future.

Health Condition Qualifications for Enhanced Annuity Plan?

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Choosing an annuity is one of the most significant and important decisions of one’s life, as once chosen an annuity cannot be cancelled or reversed. An annuity converts your pension savings into a regular guaranteed income for a fixed period of time, or for as long as you live. There are many different types of annuities, and several annuity providers. It is therefore important to shop around and use the open market option before making a commitment. An enhanced annuity plan is a type of annuity scheme, which can pay a considerably higher income to those who qualify.

Recent research shows that a high proportion of pensioners could be eligible for an enhanced annuity plan, but are simply not aware of this. Therefore, by signing on to an annuity plan that pays significantly lower income than they could receive with an impaired or enhanced annuity plan, many people lose out on thousands of pounds per year.

An annuity is one of the most important, and often the sole source of income during retirement. It is therefore vital to make sure that you are getting the best deal and optimising your pension savings through an annuity. There are simple ways to check if you could qualify for an Enhanced Annuity Plan, but first let’s understand what an enhanced annuity is.

An impaired or enhanced annuity plan is available to those who have a shorter than average life expectancy. Based on this, insurance companies can afford to pay more, since the expected term of the annuity is shorter than in a conventional case. Insurers use the applicant’s health condition and lifestyle habits to determine whether they are eligible for an impaired annuity.

Some common health conditions that qualify for an enhanced annuity plan are heart disease, diabetes, high blood pressure and obesity among others. Lifestyle habits include regular smoking. If you suffer from these or other health conditions or are a smoker, you may be eligible to receive a much higher income from your annuity than a conventional annuity.

An independent financial advisor can help you find out if you would qualify for an enhanced annuity. An IFA can also guide you through the pros and cons of each annuity type and help you make the right choice. You could also use a simple online tool available on many websites, to determine whether you qualify. Many annuity companies offer an enhanced annuity plan questionnaire or form to determine whether an applicant could potentially qualify for an enhanced annuity. The form generally consists of simple health and lifestyle related questions.

Fact is 60% of People Could Qualify for Enhanced Life Annuities?

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Many consumers approaching their retirement years, if not most of them, choose to at least look in to the possibility of investing in an annuity to help fund their lifestyle once they have stopped working. For those who do decide upon purchasing an annuity, there are several different options available. Not only are there a variety of different types of annuities but there are also several enhancements and add-ons that can be attached to certain annuities. For many consumers, the sheer number of options available can make choosing an annuity incredibly challenging. This is why each consumer should consult with an independent financial adviser. Many consumers are missing out on several enhancements available to them, including enhanced life annuities, because they do not have all of the information necessary to help them make educated decisions on how they will fund their retirement years.

Enhanced annuities allow consumers to receive higher levels of income if they have certain life threatening medical conditions. These enhanced annuities operate under the premise that the insurer can pay out higher levels of income to these consumers because it is assumed that the medical condition(s) in question will shorten the life expectancy of the consumer. This allows the consumer to pay out for a much shorter period of time.

There are several advantages to investing in an enhanced life annuities, the first of which is the higher payout. Depending on the medical or health condition, consumers can receive up to 40% more than they would with other annuity purchases. The enhanced life annuity is not subject to fluctuations based on the markets or other investment conditions. Consumers do not have to partake in any regular or ongoing medication conditions. Therefore, consumers do not have to worry about their income decreasing if their health condition improves. Knowing exactly how much money will be received and knowing that it is guaranteed and will never decrease allows the consumer to budget for their future. This budgeting can be for every day or every month expenses or it can be to anticipate a large life purchase or to pay down debt.

There are very few disadvantages to purchasing an enhanced life annuity. The first of these is that the consumer must explain their applicable medical and health conditions. Therefore, there is far more personal disclosure necessary to purchase an enhance life annuity than is the case for a standard annuity. The only other disadvantages associated with an enhanced life annuity are those that are associated with all annuities. These include that annuity payments may not keep up with the increased cost of living. It is also impossible for a consumer to vary their income payments once they have already agreed upon the annuity logistics. For any consumer who has a very short life expectancy, it may be better for them to invest in another form of retirement investment such as enhanced equity release, income drawdown, phased drawdown, and phased retirement. This would better equip the consumer to maximize all of their death benefits while receiving the highest level of income possible for their unique situation.

No matter what the choice by the consumer, consulting with an independent financial adviser should be the first action taken when deciding how to invest in retirement. With so many options available, many consumers are ill-equipped to make the right decision for their personal situation. Secondly, they may not even know all of the options available to them. That accounts for why so many consumers are inadvertently bypassing the possibility of qualifying for an enhanced annuity.

Read the Latest Tips and Tricks with an Annuity Guide

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As consumers approach their retirement years, they can spend a great deal of time and energy on determining exactly how they will fund their lifestyle after they have ceased working. For many, this means investing in some kind of annuity with the savings they have deposited in their pension pot. However, this is not the only option available to consumers and even if it were, there are several different types of annuities, all of which offer different options to consumers. With consumers having very different and unique situations, it is important that the consumer chooses wisely when purchasing any kind of investment, including an annuity. Consulting with an annuity guide can be a solid and reliable way for consumers to get the information they need in order to make an educated guess on the financial well-being of their retirement years.

An annuity guide can offer an objective opinion to most consumers. Each consumer has a unique lifestyle and certainly has unique needs.  While asking family and friends for opinions and advice can be worthwhile, consulting an annuity guide can be far more objective and can lay out most of the facts related to purchasing an annuity. It can often be a more reliable resource when trying to decide how to invest in retirement.

An annuity guide has other benefits as well. For one, it can be the most updated version of information available on the current market. That means that it allows consumers to stay current on everything affecting annuities at any given time. This means that consumers are able to make decisions based on accurate and up-to-date information. Using more than one annuity guide can also be helpful to consumers and can provide them with all of the information they may need when choosing the right annuity for their particular situation. With so many annuities available and on the market, it is crucial for consumers to get all of the information they can in order to make their most educated guess on choosing the right annuity for their particular situation.

There are several factors that go in to determining which annuity is the right choice to help fund retirement, or if an annuity is the right choice at all. An annuity guide can help consumers to make the most educated guess for their unique situation. Consulting more than one annuity guide can give consumers more than one objective view on annuities.

Which Retirement Annuity is Right for You?

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Consumers have a variety of options available to them as they approach their retirement years. Not only do consumers have to choose between different investment strategies, but within those strategies lie another series of options available to the consumer. This is especially true when it comes to retirement annuities, a very popular option for many consumers. Retirement annuities offer several unique benefits to the consumer. However, there are several different annuities from which to choose, which can present a challenge to the consumer as they choose between their options. Each retirement annuity offers unique advantages to the consumer and with so many options there is one available for every unique consumer situation

Conventional Annuities

Conventional annuities work best for those consumers who are most focused on stability. This retirement annuity guarantees a level of income for the rest of the consumer’s life, regardless of any performance in the financial markets.

Variable Annuities

Variable annuities are a form of the retirement annuity that works best for those consumers interested in taking a risk. These income payments are typically lower than a conventional annuity but can pay out higher return as they are linked to investments in the financial markets.

Investment-linked Annuities

This retirement annuity is linked to specific underlying investments and can offer large payments to the consumer. Similar to variable annuities, this type of retirement annuity is a best fit for those consumers who are willing to take a risk with their retirement and pension savings.

Enhanced Annuities

Enhanced Annuities are a very unique kind of retirement annuity. This annuity is perfect for those consumers who are looking to take advantage of a higher annuity payment, based on their health or lifestyle status. This retirement annuity does require a specific eligibility requirement but can be worthwhile the assessment process for those who qualify, as payments are  usually increased since the insurer assumes that given the health condition, the consumer will have a shortened lifespan.

Fixed Term Annuities

Consumers who are looking for some more flexibility with their investment will benefit from a fixed term annuity. This retirement annuity offers a set income amount over the course of a predetermined period of time. This retirement annuity allows the consumer to budget for the period of time in which they are receiving payments, without having to worry about any impact from the financial markets, as the income is guaranteed for the predetermined time period.