Aegon Introduces Variable Annuity in U.K.
May 18, 2008
Aegon’s UK unit announced a new U.S.-style variable annuity called “Income for Life” that's intended to offer an alternative to other retirement income tools, such as income annuities and systematic withdrawal plans, which the English call “income drawdown.”
The product is designed for investors aged 55 to 70 with between £50,000 ($98,000) and £1 million ($1.96 million) to invest. The market for variable annuities in the U.K. is growing and could reach £5 billion in the next five years, according to a published report.
Aegon’s product will offer four core portfolio funds, four multi-manager funds and a cash fund. The death benefit will be based on the client’s age at purchase and whether they are in the alternatively secured pension, unsecured pension or annuity at death product.
The fund will offer two guarantees—a guaranteed minimum income level and an income escalator that will increase as long as the underlying investments perform well. At age 60, a contract owner can begin receiving 5% of the guaranteed income base each year for life.
Standard Life, a British insurer, and AXA Group, the global insurer, are expected to offer similar products in 2008 in the U.K, according to news reports.
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