Comprehensive death benefits
The Retirement Account can provide valuable death benefits in a generous and tax-efficient way. This enables clients to tell us who they wish their money with us to go to on their death.
Guaranteed Annuity death benefits
|Money Back Guarantee||A lump sum payable on second death, up to 100% of the amount used to buy the Annuity (minus any income payments already made).|
|Income Guarantee||Annuity payments can be guaranteed for any number of years, up to a maximum of 30 years. Any remaining guaranteed income payable on death can be commuted to a lump sum if desired.|
|Dependant's Income||The Dependant’s income option pays a specified dependant up to 100% of the Annuity income until their own death.|
Pension Drawdown and Pension Savings death benefits
|Return of fund||A lump sum payable on death.|
Don’t forget to obtain quotes with and without Money Back or Income Guarantees. Many Advisers and Clients are amazed at how little it costs to add a guarantee for 20 or even 30 years, or up to 100% of money back.
How the death benefits work
The Money Back Guarantee and Income Guarantee can’t be chosen together but either can be used alongside the Dependant’s Income. If a Dependant’s Income is chosen, the named dependant must also receive the balance of any Income Guarantee payments.
For the Money Back Guarantee, Income Guarantee (when not selected alongside a Dependant’s Income) and any remaining Pension Drawdown or Pension Savings Funds, clients can let us know who they would like to receive any proceeds on their death. Any nomination made this way is not binding on us but will be considered carefully.
For lump sum payments the beneficiaries will have three options:
- Establish their own Retirement Account, leave the money invested and draw an income when
- Purchase a Guaranteed Annuity
- Take the remaining value as a lump sum
Selecting an income or Money-Back Guarantee doesn't have to cost the earth. Here is an example of the effect of an income Guarantee period. For comparison the income of an annuity with a money-back guarantee would be £2,113.
For clients who are concerned that they provide for loved ones on their death a Money-back Guarantee is now available. The benefit is a lump sum payment which, in this example, is the original purchase price of £50,000 less income paid to date of death. Although a Money-back Guarantee and Income Guarantee can’t be taken out together, the chart below compares the benefit of options assuming death after 1, 5, 10, 20 or 30 years.
Based on a £50,000 pension pot, male 65-year-old - Retirement Advantage – June 2017. These figures are only examples.