Value Protection Annuities

Under value protection, upon death of the annuitant prior to their 75th birthday, a lump sum may be paid. It is calculated as the original annuity purchase price less total gross payments made to the date of death and is subject to tax at 35%.

Under joint life annuities, there are two options:

 

Some Life Offices also offer the option of a reduced amount of Value Protection. For example, the annuitant can select 50% Value Protection, which would guarantee they would receive at least half of the purchase price in total, by taking 50% of the purchase price less total gross payments made to the date of death. This can reduce the cost considerably. Any proportion lower than 100% can be selected.