The Flexible Income Annuity is an investment linked annuity which combines the advantages of an income for life no matter how long you live, with the advantages of investing in the stockamrket in order to have the potential for long term income growth.
FIA has the following features
Income can be taken within an upper and lower limit which can be up to 20% higher than from a standard level annuity. However if the higher income is taken at the start, income payments may be less in the future.
Income can remain unchanged for five year periods at which time
the income limits are recalculated.
Those in poor health or with certain
medical conditions might qualify for a higher annuity.
There is a Minimum Income Guarantee from the outset which means that the income will not fall below a certain level.
There is also a simple but comprehensive range of investment funds to choose from. The funds have been carefully chosen for their suitability and there is a range of active funds managed by Jupiter, Newton and JP Morgan all of which have been endorsed and monitored by OBSR
Investors can choose from a range of passive funds that are rated as:
The equity and fixed income holdings of these funds will track different indexes and are managed by Vanguard.
Each investor becomes a member of MGM Advantage and receives any member bonuses that are awarded as well as Lifetime Bonuses. The latter work by sharing any remaining funds from Flexible Income Annuity customers who have died, the so called mortality cross subsidy.
Potential for income growth
Future annuity payments will fall in value if future investment returns are
lower than expected
Increases in future life expectancy can be passed on to the policyholder through
changes to survivor bonuses
Choice of investment funds
Past investment performance provides no guide to future performance
If too much income is taken in the early years it may result in lower income in
Joint life options
This website is run by William Burrows, is for information only and does not provide specific financial advice.