By: Fareeya Adam, CEO: Structured Products and Annuities at Momentum Wealth
A guaranteed annuity can help people on their financial journey by protecting their income against market fluctuations and making sure that they have an income for as long as they need it. Our wide range of annuity products and options can meet different income needs at different life stages, especially after someone has retired.
What is an annuity?
An annuity is a financial product that converts a lump sum amount into a regular and predictable income stream for the rest of someone’s life or for a specific term. A client can choose whether they want their income from the annuity to either increase or remain the same.
A client should consider a guaranteed annuity as part of their financial plan if they:
- need a regular income;
- require a guaranteed income that will not reduce over time;
- want to make sure that they don’t outlive their money;
- need a guaranteed income for a specific term;
- want to remove the uncertainty of investment markets and safeguard their future; and
- are relatively healthy.
Why choose a guaranteed annuity?It guarantees an income for life or a chosen term
1. It guarantees an income for life or a chosen term
We will pay a guaranteed income for as long as the client lives or for the term that they choose. They can also make sure that a minimum number of income payments are made in the event of them passing away prematurely. By choosing a minimum period for which income must be paid, they are able to provide for loved ones even after they have passed.
2. The income will stay the same or increas
The income a client receives is protected and will never be reduced for as long as they live or over the term that they chose. They can also choose that their income increases yearly by a fixed percentage, in line with inflation or by inflation plus a fixed percentage.
3. It takes the guesswork out of using a lump sum amount to produce an income
Choosing investment assets can be risky and stressful, especially when you rely on them to provide a regular income that will last. Clients can remove this uncertainty and rest assured that their financial future is secure.
4. Increasing investment charges will not affect the income we pay in the future
We calculate the cost of an annuity at the start of the annuity. The total cost of the annuity is taken into account when we calculate the income that we will pay for the rest of a client’s life or chosen term. This means that their income cannot decrease because of increasing costs.
Momentum Wealth offers three different types of guaranteed annuity products
Personalised control through certainty
We help financial advisers give clients more control through a comprehensive range of guaranteed annuities. Clients can benefit from having control over the amount of investment risk they are taking by including a portion of or all their money into these solutions. This can help them remain calm during even the biggest market downturns. Each person’s journey to success is unique and personal. With us, they can shape that journey in the most singular way.
To learn more about our guaranteed annuity products and how it can help you deliver reliable and trustworthy outcomes for your clients, speak to your Momentum consultant or visit momentum.co.za.
Momentum Wealth is part of Momentum Investments and Momentum Group Limited. Momentum Wealth (Pty) Ltd is an authorised financial services provider (registration number 1995/008800/07, FSP number 657). Momentum Metropolitan Life Limited is an authorised financial services and credit provider (registration number 1904/002186/06, FSP number 6406).
