Sales of ‘money-back’ guaranteed annuities accounted for one in six (15%) plans sold by Canada Life over the past 12 months.
Canada Life said the annuities, which were introduced in the wake of the 2015 pension freedoms, offer customers the choice of 100% value protections or longer guaranteed income periods of 25 years or more.
The provider said there has been a “quiet revolution” taking place in the annuity market, driven by growing demand in the wake of the pension freedoms for people to get their money back whatever happens in the future.
Nick Flynn, director of retirement income at Canada Life, said: “These money-back guarantees not only provide the risk-free certainty of income but address the elephant in the room that the insurance company keeps your money if you die early.
“A financial adviser or annuity broker is best placed to help [individuals] understand the choices available, getting the most value from their pension savings while also ensuring loved ones are protected, whatever the future may bring”
He added that these options are not available from many existing insurers, so consumers needed to make use of the open market option not only to get the best rate available, but also consider the full range of benefit options.
Canada Life said choosing the right guarantee alongside buying an annuity can add significant value, as clients are not guaranteed a lifetime income but if they die early, an income stream to their beneficiaries which can outweigh the original annuity purchase value.
Commenting, Guy Vanner, Managing Director, AKG, said: “There is now a relatively discreet group of providers offering annuities. And as with other products, taking time and considering a range of factors in selecting providers for clients is key for advisers and paraplanners.
“This due diligence will particularly need to consider provider financial strength, given the natural anxiety clients will have, at the pivotal point of retirement, and in selecting a long-term partner to provide stable operational delivery over the life of the annuity and then additionally, to continue to support and deliver any guaranteed provision.”
[Main image: logan-weaver-lK0l9pzxLps-unsplash]