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Generation Life gets flexible on annuity product after adviser consultation

While the need for retirement income solutions is great enough to be mandated in some corners, the local annuity market remains a tough nut to crack. So Generation Life has reached out to advisers and a host of others for input into its product offerings.

Financial product provider Generation Life has restructured its core annuity product after consultation with financial advisers and employing research from both thinktank Grattan Institute and the Retirement Income Review.

Pitched as the next generation of its lifetime annuity offering, LifeIncome, the June 7 restructuring saw Generation Life offer a host of enhancements designed to make the product more palatable to retirees looking for a stable, tax-effective retirement income option.

As part of its research process, advisers and consultants told Generation Life that Australians spend far less in retirement once they hit the age of 80, but are more frugal than they need to be in the early years of retirement. Those early years are typically when well-funded retirees are healthy and mobile enough to travel and spend a good chunk of their retirement, yet many fear they will run out of money. “There is also a lack of awareness around the financial products that exist to give them the peace of mind this won’t happen,” Generation Life said in a recent note.

  • The Australian annuity market has typically been seen as problematic, with providers struggling to gain a solid foothold among consumers who are reluctant to commit their remaining capital into a ‘lifetime’ offering.

    Addressing the issue with feedback from advisers and consultants in mind, Generation Life prioritised flexibility in its product enhancements. Clients can now increase their starting income at the beginning of their retirement, expand their retirement income as the investment grows over time, and reduce their income when a partner passes away and their income needs wane.

    A new dollar cost averaging facility is also being offered so that clients can guard against volatility timing by receiving a weighted average price for their investments. And following direct feedback from clients themselves, clients can now choose to receive their monthly payments at the same time as their Centrelink Age Pension payment or on alternate fortnights.

    This first round of updates to one of Generation Life’s major products reflects a desire to fit the product to the consumer, rather than hoping the consumer adjusts to the product and its design.

    “Our goal at Generation Life is to empower Australians to live the retirement lifestyle they desire and deserve. Retirement is a deeply personal and emotional time, and we understand that Australians need investment options that give them flexibility and versatility, reflecting their retirement priorities and goals,” commented Generation Life general manager of retirement solutions, Patrick Clarke.

    “As the most flexible lifetime-linked annuity in the Australian market, LifeIncome Flex gives financial advisers the ability to help Aussies increase their retirement income in the early years so they can live life to the fullest throughout their retirement.”

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