How does annuity value protection work?

Annuity value protection allows you to add death benefits when you go to purchase your annuity. If you die in the early years of your plan, the total amount of income you’ve received might be less than your pension pot that you used to buy the annuity. Value protection lets you protect your hard-earned cash by paying a lump sum balance to a beneficiary or dependent upon death.

Guarantee periods

A guarantee period promises income payments for a set number of years. If you die within that period, we'll continue to make payments to your estate for the remaining years left of the guarantee period.

As standard we offer a 1-year guaranteed period on our new annuities. 

If you increase your guarantee period, the amount of income you’re receiving will be less. You can pick a guarantee period of anywhere up to 30 years. 

Spouse benefits

If you take out value protection, you’re also able to choose for a dependent of your choice to continue payments after your death. 

So, for example, if you had a spouse benefit in place of 50% and you had a monthly income of £1,000, upon your death we would pay £500 a month to your dependent until they died.

This varies and depends on your personal circumstances. As standard, we offer value protection for 90 days from your plan start date. The cost is incorporated into your quote and reduces your income.

When you take out an annuity directly with us you can get 100% value protection for the whole of your life. However, if you take your annuity out through a financial adviser you may be able to get more flexibility, letting you alter the period of time covered and the percentage that can be paid out.

If you’re at all unsure of what will be best for you, we strongly recommend you speak to a financial adviser. They will charge for their advice, but you'll receive a recommendation based on your personal circumstances. If you don't have a financial adviser, you can find one in your area using Unbiased.