Overview
Life Annuities can offer financial security for your retirement years. They convert your savings into a steady income stream till death or for a specific period.
Life Annuities can provide peace of mind and a reliable source of income as you age. Whether you’re seeking more information or considering a life annuity for your future.
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Understanding Life Annuities can help secure your financial future. If you have questions or need more information, our resources are here to guide you. We’re dedicated to helping you make informed decisions that benefit your retirement planning.
Common Questions
Your Guide to Life Annuities in South Africa
The annuity you receive from a life annuity depends on several factors including your age, gender, and the amount you’ve invested, current interest rates, the rate that the annuity increases annually, whether the annuity is linked to two lives, the rate at which the annuity reduces when transferred to the second life, the minimum payout period as well as if the annuity is a voluntary or compulsory annuity.
Generally, once you purchase a life annuity, the terms are set and cannot be changed. However, it’s important to read the contract and discuss options with a advisor for any possible flexibility.
Upon the death of the annuitant the annuity stops, unless you have second life assured which you have selected at inception.
If you have selected a minimum payout period such as 10y and pass away before that point, the annuity will continue to pay to your beneficiaries till the period is up.
Yes, there may be commissions to an advisor, associated with purchasing a life annuity, Make sure to review these details to understand the complete cost structure.
A life annuity can be a good investment for those who want a guaranteed income till death, though it’s important to consider your own financial situation and consult with a professional before making a decision.
Many annuities offer customization options, such as additional benefits or riders such as :
Joint Lives , Minimum Guarantee periods, Lump sum payout to beneficiaries at death
A Compulsory Life Annuity is when the source of funds financing the Life Annuity is from pension funds. The annuity income is generally subject to PAYE rates of tax
A Voluntary Life Annuity is when the source of funds financing the Life Annuity is from Discretionary funds. The annuity income will be partially tax free based on a formula used by SARS. This is because the annuity is partially funded from your own invested capital and partially funded by growth
If you change your mind after purchasing an annuity, some policies offer a cancellation period, allowing you to revoke the contract within a specified timeframe. Always read your contract carefully before proceeding.
Life annuities can be considered stable investments as they are guaranteed by Life Insurance Companies
