Life Annuity

What is an Annuity?

An Annuity is a regular income policy, usually paid monthly to you, that you purchase with the proceeds from the value of your pension fund(s), or other lump sums.

The figures for the value of an annuity is usually quoted as the amount that you may receive annually for every £10,000 or £100,000 you purchase by the insurance companies that offer annuities.

The annuity is paid for your remaining life and is usually paid by an insurance company that you have purchased the policy from.

You can usually take 25% of the value of your fund as a tax free lump sum, but this will of course reduce the value of the income that you can obtain.

There are 3 different types of annuity:

• Impaired Annuities (or sometimes called Enhanced Life Annuities)
• Investment Linked Annuity
• With Profits Annuities

With annuities unlike most insurance policies it is likely that if you have smoked or you have health issues the value of your annuity is likely to be worth more than if you have no health issues.

You have a number of options available to you and your partner as to how the annuity can be paid, please see our guide on single and joint annuities for more information or if you are interested in finding out more about annuities, then please speak to one of our professional advisers and let us help you find the right annuity for you.