Annuities are a valuable tool in retirement planning, yet misconceptions can limit how they are used. Challenger’s Lifetime Annuity (Liquid Lifetime) is a truly differentiated product that may offer your clients flexibility, confidence, and peace of mind in retirement. Here are some common annuity myths and some facts to counter them, revealing how Challenger’s Liquid Lifetime annuity could benefit your clients:

Myth 1: Lifetime Annuities only provide better pension outcomes

Fact:

While lifetime annuities may provide improved Age Pension outcomes the range of benefits, they provide is significantly broader. As part of a retirement portfolio an allocation to a lifetime annuity can improve total retirement income (including, but not limited to, improved Age Pension), improve the chances of clients meeting their spending goals to life expectancy and beyond and improve estate outcomes.

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Myth 2: If your client passes away, all their money is lost.

Fact:

Challenger's Liquid Lifetime annuity offers a guaranteed death benefit during their life expectancy period, up to a maximum of 27 years. If a client passes away within the first half of this period, their beneficiaries receive 100% of the original investment, regardless of any income payments already made.

Myth 3: Lifetime Annuities lock clients into their investment.

Fact:

Challenger’s Liquid Lifetime annuity has a long period where your client can choose to cancel the investment and receive back a lump sum withdrawal payment – just in case their circumstances change. They can ask us to change these features in return for different starting payments.

* The maximum lump sum available reduces over their life expectancy.

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Myth 4: Lifetime Annuities offer lower returns compared to other investments.

Fact:

When comparing Liquid Lifetime to other investments, it is important to remember that Liquid Lifetime pays you income for life and that you have the option to have your lifetime payments adjusted each year in line with movements in the Consumer Price Index (CPI), in line with movements in the RBA cash rate (this option is called ‘RBA cash linked’) or in line with movements in domestic and global investment markets (this option is called ‘Market-linked payments’). Considering that you receive income for life, our payment rates are very competitive when compared to other investments.

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Myth 5: Annuities are expensive with high fees.

Fact:

With Challenger’s Liquid Lifetime annuity, there are no product fees. Your client receives exactly what’s promised.

Watch our myth busting videos

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Adviser resources

Register now for AdviserOnline, our comprehensive adviser portal giving you access to tools that can help you guide your clients through retirement planning and transitioning to aged care. Register online now for your free access.

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Secure regular income and apply for a Lifetime annuity for one of your clients by getting a quote below.

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Retirement Illustrator

Help your clients understand the benefits of a lifetime annuity by modelling the impacts of including a lifetime annuity as part of a retirement income plan, using our retirement illustrator tool.

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Useful documents and links

Lifetime Annuity (Liquid Lifetime) PDS

Lifetime Annuity (Liquid Lifetime) Target Market Determination (TMD)

Lifetime Annuity adviser flyer