Britannic Retire ment Services is the first specialist provider of impaired life annuities to launch in the competitive with-profits annuity market.
One has to assume a level of investment growth at the outset to determine the starting level of income. This is done by choosing an assumed investment return of 1 to 7 per cent in 0.5 per cent steps.
The AIR cannot be altered, making it crucial to get it right.
There is a minimum income guarantee that should bring peace of mind and an option to switch to a conventional gilt-backed annuity which can be exercised from the third policy anniversary and at each subsequent anniversary.
The underwriting rating is given on one of five bases – standard, enhanced, smoker, enhanced plus and enhanced special.
The minimum fund is £10,000 and maximum £500,000. Minimum and maximum ages on entry are 50 and 75. The commission range is 0 to 1.5 per cent and a servicing trail commission option is also offered. A fee-based commission option is also available.
BRS is aiming to achieve its goal by reviewing all three factors that dictate what annuity rate should be – investment returns, mortality experience and expenses.
Expenses are guaranteed to be no higher than 1 per cent for the term of the annuity.
The concept aims to be more accountable when it comes to declaring the annual bonus. In an attempt to bring transparency, BRS will be issuing an independently certified statement to each client giving a breakdown of with-profits charges, smoothing allowance and fund performance.