10 July 2017

Question of the week

What happens to my Lifetime Income investment if I pass away?

Lifetime is different from old style annuities where any remaining investment funds were kept by the life insurance company upon the death of an investor.

With Lifetime, the current value of your investment will pass to your estate upon your death.

You can also choose to invest with your partner which insures your income for both of your lives. This means if one of you passes away, the full Lifetime Withdrawal Benefit is transferred to the surviving partner for the rest of their life.

Investors who are married, in a relationship in the nature of marriage, civil union or a de facto relationship (or a relationship determined by Lifetime to be similar in nature to any of those relationships) may apply to Lifetime to have their investment held jointly.

To be eligible to apply for a joint investment, both members must be over 60 years of age and their age differential cannot be more than 10 years.

If accepted, joint holders will be charged an annual premium of 1.75% of their Protected Income Base. 

The Lifetime Withdrawal Benefit Payment Rate for the couple will be based on the age of the younger partner.

In the event of the death of one of the joint holders, the survivor will continue to receive the Lifetime Withdrawal Benefit for the rest of their life. If both partners pass away, all remaining capital will be paid to their estate.

Holding an investment like this jointly will have different implications for different investors. We recommend that you seek independent financial advice if you are considering to have your investment held jointly.

What could your retirement income be?