ANNUITIES

Suitable for elderly couple past state pension age

An annuity is designed to provide a regular income (or pension) from a fixed date-most often retirement-until the policyholder dies. Premiums can be paid for a number of years before the income payment start ('deferred annuity') but most often one large single premium is paid and the income payments start immediately-('immediate annuity'). The income payments are guaranteed to continue for as long as the policyholder lives. The amount of each payment is also guaranteed. In many instances 'deferred annuities' are the basis of pension after retirement. 'Immediate annuities' can be bought by retired people with perhaps their savings or with the proceeds of a maturing endowment assurance.