Cornerstone Insurance Insight: Why life annuity remains a smart retirement choice

Cornerstone Insurance Plc has reaffirmed the importance of life annuity as a dependable financial solution for retirees, describing it as a product that guarantees steady income and long-term financial security throughout retirement.

The company said life annuity enables retirees to receive regular income without the fear of exhausting their retirement savings, helping them maintain financial stability and peace of mind after leaving active employment.

According to the insurer, a life annuity is a contractual agreement between a retiree, known as the annuitant, and an insurance company. Under the arrangement, the retiree pays a lump sum to the insurer in exchange for guaranteed periodic payments, which may be made monthly, quarterly or at other agreed intervals for the rest of the annuitant’s life.

Cornerstone Insurance noted that the provisions of the Pension Reform Act 2014 allow holders of Retirement Savings Accounts to withdraw a lump sum from their pension savings, provided the remaining balance is sufficient to purchase either a programmed withdrawal or a life annuity.

The insurer explained that life annuity is available to retirees under the Contributory Pension Scheme and also serves individuals seeking guaranteed income during retirement. It added that employees in both the public and private sectors could adopt annuity plans early as part of a long-term financial planning strategy.

The company further stated that retirees who choose life annuity under the Contributory Pension Scheme are entitled to structured payments for life, provided they remain alive. It added that every annuity contract includes a guaranteed payment period of 10 years.

According to Cornerstone Insurance, where an annuitant dies before the expiration of the 10-year guaranteed period, the present value of the outstanding payments will be paid to the named beneficiary or next of kin. However, if the retiree lives beyond the guaranteed period, the annuity payments will continue for the rest of the person’s lifetime.

Customers can obtain more information by visiting any Cornerstone Insurance branch nationwide, calling 07086216957, or exploring the company’s offerings online at www.cornerstone.com.ng.