Canada Life is to launch an annuity product with a five-year option on 31 May, which means there is ...
Canada Life is to launch an annuity product with a five-year option on 31 May, which means there is no requirement to enter into a lifetime annuity arrangement.
The product means that a fund of £100,000 can purchase the Annuity Growth Account at £35,000, securing a return of £7,500pa for five years. The remaining £65,000 can be invested in another investment vehicle.
Based on the minimum growth rates of 7%pa, the investment is likely to have grown back to £100,000, allowing the annuitant to purchase another five years or choose a lifetime arrangement.
The client's annuity level is guaranteed not to change over the first five years. The only way the annuity holder can lose is if the stock market collapses or if annuity rates fall further, Neil Stevens, head of the IFA division at Canada Life said.
The product also has a range of death benefit options to suit each client's requirements. There is also a choice of three levels of spouse's benefits.