Annuity Certain

This is purchased mainly from those pension funds that have a benefit for spouses & orphans should their employee die before retirement.

The annuity is normally guaranteed as specified by the pension rules, but to a maximum of the date the minor turns 21yrs.

What is an Annuity?

An annuity is a contract between you and an insurance company where you pay the insurer a specified lumps sum amount and in return you receive regular payments either for life or for a stated period of time.

Why Buy an Annuity?

In Botswana most pension funds insist upon retirement that a portion of the pension payout be used to purchase a compulsory annuity. Refer to your pension fund rules for clarification.

An annuity is a financial contract between the insurer and the insured that provides a guaranteed income for life for the insured.

You can choose how often to receive your income payment, either monthly, quarterly or annually. You choose s a payout plan to fit your particular needs.

You pay income taxes only as you receive your payments. When you receive income payments, you will be taxed only on the earnings paid out to you.

You lessen your financial worries. Financial management can be a burden in your retirement years. Because you don't know how long you'll live, it's hard to be sure your resources will last as long as you need them. Immediate annuities remove these uncertainties as the contract provides you with a predictable fixed payment for life, so you can concentrate on enjoying your hard-earned retirement.

What types of annuities are available?

• Immediate annuity
• Annuity Certain
• Ill – health annuity

What are the options available?

When deciding on an annuity there is different options available to select from. The best advice is to get various quotes from your broker to compare the effect of these options.

Single Life Annuity

You can opt to receive guaranteed income for the rest of your life and where payments cease upon your death.

Joint Life Annuity

You can opt to receive a guaranteed income for the rest of your life and where payments revert to your spouse in the event of your death. The income that reverts to your spouse is guaranteed until his/her death.

Guaranteed Period

As with single and joint life annuity, the income is guaranteed for life. If you die before the guarantee period is over, your beneficiaries will receive the remaining number of payments.

Annual Updates

Instead of a fixed monthly income, you can select to escalate the payment on an annual basis. This will reduce the initial annuity amount but increases to keep up with inflation.

How are payments made?

Payments made on a monthly basis will be transferred directly into the insured’s bank account. Payments on other frequencies can be made by bank transfer or as a cheque payment.