Different ways of protecting your loved ones

There is greater flexibility these days to tailor benefits payable on death from a Guaranteed Income for Life (GIfL) solution. This means you can better match your client’s personal circumstances and meet their objectives. What’s more, any benefits payable on death before age 75 are tax-free. After age 75, benefits payable on death are taxed at the marginal rate of the person receiving the benefit.

Options to consider when thinking of different ways to protect your loved ones are:

 

Guarantee Period

We now offer a choice of guarantee periods. Anything between one and thirty years. What’s more, your clients can nominate who they’d like to receive the income. 

 

Dependants Pension

Your clients can select what percentage of their income should continue to be paid on their death, up to a maximum of 100%, and nominate who they’d like to receive the money. This is decided when taking out the GIfL and cannot be changed once the plan has been put into place.  

 

Value Protection

Value protection provides a lump sum on death. The client can choose what level of value protection is required. If 100% is chosen, the original amount paid would be returned less gross payments made to the date of death. Clients can select any percentage up to 100%. 

 

Here’s an indication of the impact of different options on income (based on a 65 year old with a £50,000 fund, net of any lump sum, suffering from diabetes).

 

Comparisons are based on an individual aged 65 who has diabetes Type 2 diagnosed nine years ago. They supplied HbA1c readings and take one medication daily. They have a healthy spouse aged 62, a £50,000 pension fund, payable monthly in arrears, no overlap where applicable, based on RH2 7RT postcode, where a facilitated adviser charge of 2% has been assumed. Just annuity rates, 02.02.2017.