JUST SA’s weekly jargon buster aims to give simple, plain English explanations of typical words and phrases used in the financial industry, in particular words relating to guaranteed life annuities and living annuities.
This week, we look at the letter: E
| E | Enhanced Annuity | An enhanced annuity is a life annuity that pays a higher income to an individual if aspects of their lifestyle (such as smoking and drinking alcohol), socio-economic or medical history could shorten their life expectancy. By considering these factors, the annuity provider may offer a higher starting income, to reflect the potentially shorter lifespan of the annuitant compared to average life expectancy. |
| Escalation | Escalation describes the way in which an annuity income can increase each year. You may choose to have no increase (level annuity) or increase your annuity each year at a fixed rate (say 5% per annum) or in line with the change in a measure of inflation, such as the Consumer Price Index (CPI). |
Source: Just Retirement SA, [email protected].
The jargon buster is intended for information purposes only. It should not be regarded as advice as defined in the Financial Advisory and Intermediary Services Act 37 of 2002, or any form of advice in respect of the policy, retirement, tax, legal or other professional service whatsoever.
You are encouraged to seek advice from an authorised financial adviser, or to independently decide what financial product is appropriate for you based upon your own judgement and understanding of your financial needs.
Just Retirement Life (South Africa) Limited is a licensed life company, regulated by the Prudential Authority of the South African Reserve Bank and the Financial Sector Conduct Authority as an authorised financial services provider (FSP number 46423).
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