Aviva has increased the protection it offers to annuity customers as the provider calls on the industry to automatically underwrite all annuities.
Aviva has today announced improvements to the standard guarantees it offers on its annuity products.
First, it is introducing an “annuity value protection” promise which means if a person dies within 90 days of buying an annuity, the provider will return their original pension fund to their estate.
Aviva is also implementing a “default one year guarantee” so if a customer dies after 90 days of taking an annuity, but within a year of the policy beginning, the provider will continue to make annuity payments to their estate for the remainder of the first year.
In addition, Aviva wants the industry to incorporate personal underwriting of annuities into the shopping around code of conduct launched by the Association of British Insurers in December 2011.
An Aviva spokesman says the provider sends out a medical questionnaire alongside the retirement packs distributed to customers. It wants all providers to adopt a similar process so everyone gets an annuity that reflects their own personal circumstances.
Finally, Aviva wants non-advised annuity sales, which are not covered by RDR rules, to meet the same cost transparency standards as advised sales.
Aviva managing director of at retirement Clive Bolton says: “Aviva is committed to leading by example and we believe everyone – retirement providers, Government, regulators, advisers and individuals alike – should take responsibility to act on these ideas and help to provide financial security and peace of mind for current and future retirees.
“This approach rests on the desire to ensure that people receive an appropriate level of advice to suit their individual circumstances and they fully understand the type of help they are getting.
“Therefore, we call on the industry to ensure non-advised annuity sales meet the same cost transparency standards as advised sales.
“We have also enhanced consumer protection on our annuity products by increasing guarantees to reassure customers and further increase their confidence in this sector. We hope that this is just the first step and that the rest of the annuity industry will follow our lead by making such guarantees a standard feature of their annuity offering.”