Learning Material Sample
Investment and risk7.3 Life assurance investments - annuitiesIn this section, we describe in detail, the structures, pricing, charges, uses and variations of annuities.
In exchange for a lump sum, an investor can purchase an annuity which guarantees to make regular payments of income either throughout the ...
Shortened demo course. See details at foot of page. ...tant can choose to have payments made throughout life or for a set period. Equally payments can be made immediately or after a set period. In return for the paym...
Shortened demo course. See details at foot of page. ...upon their tax status. Annuity payments will be guaranteed throughout the agreed term, although it could vary depending upon escalation requirements or as a result of fund performance (see with profits and unit linked annuiti...
Shortened demo course. See details at foot of page. ...ity payments will be guaranteed throughout the agreed term, although it could vary depending upon escalation requirements or as a result of fund performance (see with profits and unit linked annuities). Once an individual agrees to purchase an annuity, then there is no real opportunity to encash the investment and receive a s...
Shortened demo course. See details at foot of page. ...ual agrees to purchase an annuity, then there is no real opportunity to encash the investment and receive a surrender value. Taxation implications on the annuitant will depend upo...
Shortened demo course. See details at foot of page. ...bject to tax where applicable at 10%, 20%, 40% or 45%. There are several variations to annuity payments. The following are a list common to both types:
Escalation Income can either be received on a level basis or it could increase. Where the annuitant wishes to build in some increase to the annuity payment over time. Generally the rate offered will be some way below that offered for a level annuity and will take some time before it exceeds it. Rates of increase can be by a fixed amount ... Shortened demo course. See details at foot of page. ...nuses exceed expectations then a higher annuity payment can later be made. If on the other hand, bonus rates do not increase as planned, lower sums will be payable to the annuitant.Unit linked annuities Work in a similar fashion to with profits annuities. Using an anticipated growth rate, the annuitant will receive a set amount of annuity. If the investment fund performs above this rate, then payments can increase. If below, they reduce. |
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