The Just Retirement Fixed Term Annuity offers an innovative conversion feature that can be used to convert to another retirement income product, at any point during the Plan term, for any reason, if it suits your clients' individual circumstances and financial advice has been given.
The feature is automatically included when Plan Protection is selected at the outset. Plan Protection returns a lump sum to your clients' beneficiaries (subject to a tax charge, currently 55%) should your client die during the Plan term.
How does the conversion feature work? The conversion feature is primarily designed to allow your client to convert their existing Fixed Term Annuity to an enhanced annuity at any point during the term, potentially giving them a much higher income than traditional lifetime annuities, providing their state of health or lifestyle choices qualify for an enhancement.
Other common reasons for advising a client to exercise the conversion feature:
- death of a spouse, civil partner or financial dependant
- divorce or the ending of a civil partnership
- marriage or civil partnership
- redundancy (for those drawing a retirement income while continuing to work)
- change in financial circumstances leading to a new income need.
Once the conversion feature is exercised, the conversion value can be used to buy:
- a lifetime annuity (either a standard annuity or an enhanced annuity if the client qualifies)
- a capped drawdown arrangement
- any other appropriate retirement income product.
Risks of the conversion featureFuture income: the plan is designed to be held until the end of the term. If the conversion feature is exercised, the level of income from another retirement income product may be higher or lower than their current FTA income.
Conversion value: the conversion value may be less than the Guaranteed Maturity Amount and the original fund value if the conversion feature is exercised.
For full details of the benefits and risks of the Just Retirement Fixed Term Annuity, please refer to our Key Features Document.
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