Variable Annuity Product Choices

Investment-Linked Annuities

Like conventional annuities, the basic level of initial income is dependent upon your age, sex, size of fund and options selected. Additionally, you are normally required to assume a future rate of growth for the underlying funds – the higher the selected rate, the higher your starting income will be, and vice versa.

In practice, the actual return on the investments may be lower, equal to, or higher than the rate you assumed. If the actual performance is lower than assumed at the outset, your income will fall. Each provider has their own rules and charges which must be taken into account. The following example is simplistic and is provided to help illustrate only:

Subject to the variable annuity provider’s rules, you may change the assumed rate of future growth or switch to a conventional annuity at given points in the future.

Flexible Annuities

A number of unique products have been developed by annuity providers. Although they are all different in design, each tries to provide flexibility and growth potential. For example, “Limited Period Annuities” combine a guaranteed income for a fixed temporary period (which is therefore cheaper to provide than buying the full guaranteed for a lifetime income) with the balance of your pension funds remaining invested. After each temporary period, the invested pension fund is then used to either provide a new fixed period annuity, or you can decide to buy a lifetime income.

Other unique variable annuity products offer different ways to protect your fund for your financial dependants. Speak to your Annuity Bureau Consultant to assess the full range of variable annuities available.