Earlier this week, a Dispatches investigation by Channel 4 highlighted the case of Frank Adams, who was sold a single life annuity
by Scottish Life.
Single Life Annuity
for life with return of purchase price (ROP) payable on death - A fixed amount, guaranteed at the policy inception, will be paid to the annuitant throughout his life.
Three years ago a 65-year-old man purchasing a single life annuity
with a PS100,000 pension pot could have secured an income of approximately PS7,000 per year.
The amount included is the amount that the same annuity issuer will charge the survivor for a single life annuity
, as of the date of the first annuitant's death.
Not bad going when the provider, which did not sell impaired annuities, had originally offered a single life annuity
of pounds 3,600 a year.
Find the single life annuity
factor for a fifteen year annuity at a 1.4 percent interest rate--13.4453 (from the Annuity, Income, and Remainder Interests for a Term Certain Table in Appendix C).
(1) Find the single life annuity
factor for a person age 70 at a 5.2% rate of return--9.1808 (from Single Life Annuity
Factors Table in Appendix C).
The amount the same insurance company would charge the survivor for a single life annuity
as of the date of the first annuitant's death.
Annuity payments can be received on a fixed or variable basis, or a combination of both, and can be paid as a single life annuity
or joint and survivor annuity.
(a) A settlement option involving a single life annuity
is the simplest and purest form of assuring a stream of income that cannot be outlived.
Under PM, a retiree chooses a single life annuity
. His benefit ends when the retiree dies, so the spouse is completely exposed.
A single life annuity
(with no refund feature) makes payments until the single covered life (the sole annuitant) dies.