A Retirement Annuity for South Africa

The policy pays out on your retirement, or on death before retirement. On the retirement date you can choose to leave the retirement value invested and can continue with or without premiums. Your policy can remain in the selected portfolio or it can be switched to another portfolio. You can also choose to retire your policy at any time after age 55 but you must retire by age 70.

• On retirement after age 55 and where the policy has been going for more than 3 years, the value of the investment account is paid. On retirement after age 55 and where the policy has not been going for more than 3 years, the value of the investment account less the exit fee is paid.
• On transfer to another approved retirement annuity or pension fund, the value of investment account, less the exit fee is paid.
• On death before retirement the value of the investment account at the date of death is paid.
• On ill-health early retirement the value of investment account, less the exit fee, at the date of retirement is paid.

You can pay a minimum premium of R100 a month or a single payment of R3000.

Yes, you have the option of an annual increase in premiums to ensure your benefits remain in line with inflation, anything up to a maximum of 20%.

An investment account will be set up and maintained for each policyholder. This account is a record of the policyholder’s investment in the policy.

Each month the premium paid by the policyholder is added to the policyholder’s investment account. The premiums are invested in the policyholder’s selected investment portfolio. As the assets in this portfolio increase and decrease in value, so does the value of the policyholder’s investment account increase and decrease in value. In this way, over the long-term the policyholder’s investment is expected to grow.

A policy fee of R8.00 per month (R96.00 for single premiums) is deducted from the premium before it is invested in the investment account. If the plan is made paid-up, then the monthly paid-up policy fee of R5.00 per month will continue to be deducted from the investment account.

If you stop paying the premiums before end of the term the policy will be “PAID-UP”.

Because of the generous tax allowances, there are certain restrictions:

• The policy cannot be surrendered,
• The policy cannot acquire a loan value,
• Cessions are not allowed (i.e. it cannot be ceded to a bank as security for a bank loan),
• Benefits may only be taken between ages 55 and 70 (unless the policyholder is unable to perform his job due to disability / illness),
• Only one third of the benefits at retirement may be taken as a lump sum,
• The full income provided by the life annuity (purchased from any approved life insurer) is taxable.