How will a Purchased Life Annuity work?

In return for a single cash payment of not less than £5000, we provide a fixed income, to be paid in instalments at either monthly or yearly intervals in arrears. The income can be paid to either one or two persons, and may be someone other than yourself, provided the youngest annuitant is aged 50 years or over. [Back To Top]

For how long will the income be paid?

You may choose to have the income paid either:

1. for the lifetime of an annuitant (or survivor of joint annuitants), or
2. for a specified term of between five and ten years.

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What Guarantee Options are available?

The following guarantees provide an element of Capital Protection or Income Protection:

• Capital Guarantee (Temporary or Lifetime Annuities)
  If the annuitant (or surviving annuitant) dies at any time during the agreed term, we will pay their estate the shortfall between the gross payments already made and the purchase price.
• Guaranteed Annuity (Lifetime Annuities only)
  If the annuitant (or surviving annuitant) dies during the specified period, a discounted lump sum payment will be made to the estate. This will be calculated by reference to actuarial guidelines applicable at the time.

If you do not elect to have either of the above guarantee options applied to a plan, the income will cease on the death of the annuitant (or survivor of joint annuitants), even if this occurs in the early years of the plan. No further payment will be made to the estate. [Back To Top]

Will choosing a Guarantee Option affect the income?

Yes. The cost of providing the life assurance element for a guarantee option will be reflected in the rate used when calculating the annuity. To illustrate the different options, personal examples can be provided upon request. [Back To Top]

How will the annuity be paid?

The annuitant will receive the first payment by cheque, with subsequent payments being made directly into the bank or building society chosen. Payments will be made monthly or annually in arrears, as agreed between us and shown in the policy document. [Back To Top]

What about taxation?

For tax purposes, the income is split into two parts:

1. The Capital Amount - This is considered to be a return of capital and will not be subject to tax. To apply for this allowance, Inland Revenue Form PLA1, completed by the annuitant(s), must be returned with the application.
2. The Taxable Amount - if the annuitant is, or becomes liable for tax, the taxable amount is treated as investment income, and is taxed accordingly. The taxable amount is calculated by reference to tables agreed with Inland Revenue and cannot change from the amount stated in the Policy Document. Annuitants who are not liable for tax should submit completed Inland Revenue forms R89 (R86 for joint annuitants) if they wish to apply for the income to be paid gross.

Your Independent Financial Adviser (IFA) will advise you on any other matters relating to tax, including the completion of Inland Revenue forms.

Please remember that tax laws are subject to change. [Back To Top]

How should I decide which is the best option?

Personal illustrations showing the options you wish to consider will be provided to your adviser, who will help you to decide, and will submit the application to us on your behalf. [Back To Top]

How much will the advice cost?

Your adviser will give you details of the cost. We pay commission to authorised advisers. The amount of commission depends on the size of the purchase price and is shown on personal illustrations and policy documents. [Back To Top]

Is my decision then final?

No. As soon as we receive the completed application form and your cheque in respect of the purchase price, we will send you a Notice of the Right to Cancel. If you wish to exercise your legal right to cancel, you must post the cancellation form back to us on or before the fourteenth (14th) day after you receive the Notice. If you do not cancel within this period, you will not be able to terminate the policy later. [Back To Top]

Further Information

The Company


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Immediate Annuities - Commission