Canada Life will launch an annuity product at the end of May that aims to provide enhanced benefits ...
Canada Life will launch an annuity product at the end of May that aims to provide enhanced benefits for surviving spouses.
Usually with annuities the benefit for surviving spouses is substantially lower than the full annuity.
This has been seen as an incentive for some to enter income drawdown rather than purchase an annuity as the death benefits are more favourable in drawdown.
Canada Life's product is looking to ensure spouses get a higher income upon the death of the annuitant. A possible means of doing so would be through enhanced life cover.
The product, which has been in development for more than year, has undergone two months of negotiations with the Inland Revenue and FSA, before getting approval.
The group will not release full details on the product but Neil Stevens, head of Canada Life's IFA division said: "There is nothing else that exists on the market like this product.
"It is not a unit-linked annuity, nor a with-profits annuity and neither is it a drawdown plan though it will offer some of the advantages of a drawdown."
The group believe the annuity will offer greater flexibility in retirement and is due to be launched on 31 May.