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How to use an annuity
Five ways lifetime annuities improve retirement
Using a lifetime annuity as part of your clients' retirement income plan can help solve a number of complex retirement challenges. We explore five ways lifetime annuities can improve retirement.
How lifetime annuities have changed
Lifetime annuities aren’t what they used to be. Today, they offer your clients more features and flexibility than ever before. Find out how annuities have adapted to the current environment.
Request a one-on-one with a Challenger BDM
Request a one-on-one session with a Challenger BDM to discuss retirement income and aged care strategies and how they can benefit your clients.
Retirement and aged care strategies
4 things clients get wrong about lifetime annuities
When considering lifetime annuities as part of a retirement income plan, you may have questions about how suitable they are for your clients. We address four things clients get wrong about lifetime annuities.
Help clients navigate a low rate environment
A ‘safety-first’ approach to retirement income can provide your clients with the peace of mind they seek in retirement. We compare this approach to alternative strategies in managing low interest rates and market swings of 2020.
Social security means test rules changes
Changes to the assets and income test treatment of lifetime income streams applied from 1 July 2019 for pre and post retirees could change your clients Age Pension and retirement income outcomes.
Content to use with your clients
Retirement income resources for clients
Access all our retirement income resources to use with your clients, including white label material.
Aged care resources for clients
Access all our aged care resources to use with your clients, including white label material.
Download our guide to income in retirement
Share this with your clients to help them discover how to support existing income with an approach that is fast becoming a smart strategy for modern retirees.
Case studies
Retirement income case studies
View our case studies on how to use lifetime and fixed term annuities in a retirement portfolio.
Aged care case studies
View our aged care case studies, and see how a Challenger CarePlus annuity can be used with your clients.
Try our online modelling tools
Use our online modelling tools to run a client case study to see how a lifetime income stream could benefit your client.
Tools
Webinars and learning modules
Webinars
Register for upcoming webinars or watch webinar recordings to learn about retirement solutions, aged care, our products and more.
Request a one-on-one with a Challenger BDM
Request a one-on-one session with a Challenger BDM to discuss retirement income and aged care strategies and how they can benefit your clients.
Age Pension, simplified
Helping advisers with a simplified Age Pension application process, access the complimentary ‘Retirement Essentials’ Age Pension Concierge Service and tools today (Terms and Conditions apply).
FAQs
Annuities provide a secure guaranteed income for your clients’ lifetime or for a fixed term that they choose, regardless of how share markets perform. They can complement your clients’ other retirement investments and sources of income, such as their super and the Age Pension.
Generally, anyone aged 18 years and older (aged 60 years and older if clients are using their super to invest) can invest in a Challenger annuity.
Depending on the type of annuity, an annuity can provide your clients with the following benefits:
- guaranteed regular payments for a fixed term, or for life;
- potential improved Age Pension outcomes such as an increase or the ability to access the Age Pension for the first time when investing in a lifetime annuity;
- protection from key retirement risks like outliving retirement income and market volatility;
- flexibility to withdraw and be paid a lump sum if their circumstances change over life expectancy or term;
- cash flow certainty that can help maintain their standard of living and provide peace of mind; and
- control over estate planning.
Some client concerns that annuities can help solve for may include the risk of outliving their retirement income and becoming completely reliant on the Age Pension, the impact of market conditions on the value of their investments, investing in a low rate environment and the risk that over time inflation will increase the cost of living.
While Challenger annuities are designed to be held for life or the full investment term, there may be flexibility to access a lump sum if your clients’ circumstances change. Please refer to the relevant Product Disclosure Statement (PDS) for more information.
Challenger annuities are guaranteed by Challenger Life Company Limited (Challenger Life), a Life Company regulated by the Australian Prudential Regulation Authority (APRA). APRA is the authority that regulates the banking, insurance and superannuation industries.
Challenger Life is subject to detailed legislative and regulatory requirements designed to ensure that your client’s investment is kept safe. APRA monitors our investments with the aim of ensuring that we can meet the promises that we have made to your clients both now and into the future. When your clients invest in a Challenger annuity their capital investment goes into a fund along with the capital received from other annuity customers. This fund is known as the statutory fund, and all regular payments to our annuity customers are paid from this fund.
We are also required by APRA to invest our own money into the fund. We have enough of our own money, together with investors’ money invested in the statutory funds that we manage to ensure that we continue to cover our promises made to your clients - even if a significant investment market shock event occurred. If at any time we do not achieve investment returns that are sufficient to cover all the promises that we have made to our annuity customers, we must cover the shortfall from the money we have invested in the fund. Find out more about our guarantee.
Challenger Life is subject to detailed legislative and regulatory requirements designed to ensure that your client’s investment is kept safe. APRA monitors our investments with the aim of ensuring that we can meet the promises that we have made to your clients both now and into the future. When your clients invest in a Challenger annuity their capital investment goes into a fund along with the capital received from other annuity customers. This fund is known as the statutory fund, and all regular payments to our annuity customers are paid from this fund.
We are also required by APRA to invest our own money into the fund. We have enough of our own money, together with investors’ money invested in the statutory funds that we manage to ensure that we continue to cover our promises made to your clients - even if a significant investment market shock event occurred. If at any time we do not achieve investment returns that are sufficient to cover all the promises that we have made to our annuity customers, we must cover the shortfall from the money we have invested in the fund. Find out more about our guarantee.
Challenger annuities provide your clients with the comfort of knowing that we can generally pay any lump sum death benefits or continue regular payments to their nominated beneficiary(ies) or estate upon their death within a known withdrawal period. The options available will vary depending on the type of annuity and whether it’s purchased with super or ordinary money. Please refer to the relevant Product Disclosure Statement (PDS) for more information.
We understand that this is a question that your clients may have concerning their choice of where to invest their hard-earned money in retirement. When most people ask this question, they are generally referring to Challenger Limited, the ASX-listed company. It’s important to understand that Challenger annuities are guaranteed by Challenger Life rather than by Challenger Limited. The assets of Challenger Life backing the annuities are held in a separate statutory fund which is governed by the restrictions in the Life Insurance Act and the Prudential Standards issued by APRA. These assets are unaffected by the Challenger Limited share price.
Challenger annuities are guaranteed by Challenger Life, a Life Company regulated by the Australian Prudential Regulation Authority (APRA). We have enough of our own money, together with investors’ money invested in the statutory funds that we manage to ensure that we continue to cover our promises made to your clients - even if a significant investment market shock event occurred.
Challenger annuities are guaranteed by Challenger Life, a Life Company regulated by the Australian Prudential Regulation Authority (APRA). We have enough of our own money, together with investors’ money invested in the statutory funds that we manage to ensure that we continue to cover our promises made to your clients - even if a significant investment market shock event occurred.
Our products have no fees (although you may charge fees to your clients for your services). The amount we promise to pay your clients is what they will receive. This is important to note when comparing our products to other investments that may charge separate management and investment fees.
We simply invest the money your clients give us. We take the costs of providing an annuity (including payments to a third party administrator if applicable) into account when setting the amount of your clients’ regular payments, and we also make various assumptions about your clients’ longevity and potential investment returns.
If we achieve investment returns that are above the amount required to cover the promises made to our annuity investors, we keep the excess amount. This is how Challenger makes a profit. If we do not achieve investment returns that are sufficient to cover all promises made to our annuity investors, we cover the shortfall from our own money.
If we achieve investment returns that are above the amount required to cover the promises made to our annuity investors, we keep the excess amount. This is how Challenger makes a profit. If we do not achieve investment returns that are sufficient to cover all promises made to our annuity investors, we cover the shortfall from our own money.
Challenger Limited is an ASX-listed investment management firm and includes an APRA-regulated life insurer (Challenger Life). We are not underwritten by any other entity. You can find out more about the Challenger Group here.
Your client’s annuity payments are not impacted by our share price and are guaranteed by Challenger Life, a Life Company regulated by the Australian Prudential Regulation Authority (APRA). Find out more about how we can make that guarantee to you.
Challenger makes investments subject to restrictions outlined by the Life Insurance Act. Money is invested into cash, shares, government and corporate bonds, property investments, infrastructure investments and other assets. These investments are chosen to match the primary objectives of the fund – consistent returns, and to match cash flow in with payments out to annuity customers. Read our FY20 annual review for more information.
Challenger is regulated under the Life Insurance Act and the prudential standards made under it. Compliance with these regulations is supervised by APRA to help ensure we are able to meet our obligations to your clients now, and in the future.
Challenger Life holds significantly more capital in the fund than the APRA minimum. So even if an unfortunate event occurs, or there is a significant share market or property crash, our customers’ annuity and future payments are still guaranteed. In fact, we aim to hold between 1.3 times and 1.6 times APRA’s minimum requirement no matter the market environment.
Challenger Life holds significantly more capital in the fund than the APRA minimum. So even if an unfortunate event occurs, or there is a significant share market or property crash, our customers’ annuity and future payments are still guaranteed. In fact, we aim to hold between 1.3 times and 1.6 times APRA’s minimum requirement no matter the market environment.