LV= uses cookies to give you the best experience online and to provide anonymised, aggregated site usage data. You can find out what cookies we use and how you can disable them in our Cookie Policy. By continuing to use our website, you agree to our use of cookies in accordance with our cookie policy unless you have disabled them.

skip to main content

Annuity Glossary

Call us for a free chat on 0800 032 9301

Lines open: 8.30am to 6pm Monday to Friday

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


Impaired Life Annuity

    An Impaired Life Annuity is a type of Lifetime Annuity offered by some insurance companies/annuity providers that are designed for people that suffer from, or have suffered from, a medical condition that results in a reduced life expectancy.

    To qualify for an Impaired Life Annuity, you will need to complete a questionnaire on your medical history. The annuity provider may also ask for further information from your doctor and/ or ask you to attend a medical examination. The annuity rate that you’re offered is based on an estimate of your personal life expectancy calculated using the medical information supplied.


    Variable Annuity

    A Variable Annuity is a type of annuity in which the account balance may fluctuate based on the value of underlying investments such as stocks and bonds. The contract owner has the ability to allocate money among several available investment choices. The contract owner, not the insurance company issuing the contract, assumes investment risks



    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.


    Joint Life Annuity

    You can normally choose whether to set your annuity up on a Single Life or a Joint Life basis.

    • A single life annuity is just for you and will normally stop paying out income when you die, though payments may continue for a limited time if you’ve chosen a guarantee period.
    • A joint-life annuity provides you with an income for life, but then transfers to your spouse, partner or any other chosen beneficiary when you die and pays them a regular income for the rest of their lives. Or it can be used to pay income to your dependent child, usually until they're 23.


    Value Protection

    This is a way of protecting the value of your annuity should you die earlier than expected. In the event of your death the annuity provider will return any unpaid income to your beneficiaries as a lump sum. This may be tax free if you pass away before age 75, if after 75 the lump sum will be taxed at your beneficiaries marginal rate of tax.


    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.


Have a commitment free chat with a Pension Specialist

Call us on 0800 032 9301

TextDirect: First dial 18001

Lines open: 9am 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