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Annuity Glossary

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Lines open: 8.30am to 6pm Monday to Friday

This is a guide to some of the main terms and jargon you may come across when looking at annuities.

What does it all mean?

Annuities have their own terminology – it is important that you understand what the terms mean, especially if you are thinking about taking out a type of annuity. We've pulled together some of this terminally for you, to help with the jargon busting!

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Annuity

    An annuity is a retirement product that pays you a guaranteed level of income for a specific period of time or your lifetime.

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Annuitant

    An annuitant is the person(s) taking out an annuity

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    Lifetime Annuity

    A Lifetime Annuity is a type of retirement income product that you buy with your pension pot. It guarantees you with a regular retirement income for life. Lifetime annuity options and features vary and your choice will depend on your personal circumstances, your life expectancy and your attitude to risk.

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    Fixed Term Annuity

    A Fixed Term Annuity is a retirement product that pays you a certain level of income for a specific period of time. The time period usually would range anywhere between 3-30+years.

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    Enhanced Annuity

    An Enhanced Annuity is a type of Lifetime Annuity offered by some insurance companies/annuity providers. An Enhanced Annuity may offer a higher annuity rate (and therefore a higher income) than a standard Lifetime Annuity, if you meet certain criteria which could shorten your life expectancy.

    The criterion could have things such as:

    • You are/have been a smoker and/or
    • You’re overweight and/or
    • You have spent a significant part of your working life in a hazardous environment
    • You have a terminal/life threatening illness

    You may be asked additional questions before you are offered an Enhanced Annuity rate. The annuity rate that you are offered is based on the average life expectancy for people meeting the above criteria.

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    Beneficiary

    A beneficiary is a person(s) who receive(s) money upon the death of the annuity’s contract owner or annuitant. The contract owner decides who the beneficiary will be ahead of their death.

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    Guarantee Period

    A Guaranteed Period is an option to ensure that a minimum number of year’s payments are made by the annuity, even if you die. The maximum guarantee period is 30+ years. If you die during the guarantee period, the annuity will continue to make income payments until the end of the selected guarantee period or you could select that the remaining payments are paid as a lump sum.

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Have a commitment free chat with a Pension Specialist

Call us on 0800 032 9301

TextDirect: First dial 18001

Lines open: 8.30am to 6pm Monday to Friday. We may record and/or monitor calls for training and audit purposes.

Start your conversation with a pension specialist today by telling us about:

  • Your current pension pots
  • Any contributions you're making
  • How much you've already saved