LV= has launched a tool which allows advisers to compare the suitability of fixed-term annuities against standard annuities.
LV= says the tool analyses the extent to which annuity rates or a client’s circumstances would need to change for them to be financially better off with a fixed-term annuity.
LV= head of annuities and equity release Vanessa Owen says: “The theory behind a fixed-term annuity is well known, offering clients the ability to benefit from future changes in annuity rates, health or personal circumstances.
“However, the extent of change that needs to take place for a fixed-term annuity to be more beneficial has been difficult for advisers to quantify.
“With our tool it is possible to provide a detailed comparison of the different retirement income a fixed-term or lifetime annuity offers.”
Worldwide Financial Planning IFA Nick McBreen says: “Any tool that can help advisers compare the merits of different products should be welcomed.”
LV=, Aviva, Just Retirement and Primetime Retirement currently offer fixed-term annuity products through UK advisers.
In September, MetLife announced it was exiting the fixed-term annuity market.
At the time, MetLife said the decision was made in response to historically low interest rates which prevented it from pricing the product competitively.