Every financial product has advantages and disadvantages, benefits and costs.
For this reason, annuities are no stranger to the love-hate relationship in the financial world. Incorrect product advice and a misunderstanding about the features of annuities may lead to mixed emotions and different opinions, says Karen Wentzel, Head of Annuities at Sanlam Employee Benefits.
Annuities are split into two categories: guaranteed life and living annuities.
Guaranteed Life Annuities
For all life annuities, pensioners carry no longevity or investment risk, as initial pensions and increases are guaranteed for life, and will never decrease.