AIICO Insurance Plc said it paid a total of N52.6 billion to its annuity customers in five years.
The amount which covers 2019 to 2023 is broken down thus: 2019 – N5.2 billion; 2020 – N6.0 billion; 2021 – N6.2 billion: 2022 – N7.8 billion and 2023 – N12.6 billion.
Speaking at a one-day training workshop organised by the underwriting firm to members of the Nigerian Association of Insurance and Pension Editors (NAIPE) in Lagos, Mr. Joseph Ogedengbe, Annuity Product Manager, noted that the company is committed to ensuring retirees receive their payments as and when due.
On the definition of Annuity, he said it is a financial product and contract between an individual and an insurance company where a lump-sum payment or series of payments known as premium is made to the insurer, and in return, the insurer pays a regular income to the client beginning either immediately or at some point in the future, and for a lifetime.
He said the benefits of annuity cover among other things, security, risk transfer mechanism, longevity risk, flexibility, and estate planning.
While explaining the difference between Programmed Withdrawal (PW) and Retiree Life Annuity (RLA), Joseph stated that the revised Pension Reform Act of 2014 gives a retiree the liberty to choose either Programmed Withdrawal (PW) or Retiree Life Annuity (RLA) as a retirement benefit option.
According to him Programmed Withdrawal, is a product offered by Pension Fund Administrators (PFAs) for periodic pension payments (monthly/quarterly) to a retiree from the balance in their Retirement Saving Account (RSA), for as long as the RSA balance can accommodate, where the RSA balance is exhausted, the retiree will only get guaranteed minimum pension.
He said Retiree Life Annuity is a product offered by licensed insurance company to pay an agreed periodic income (pension) to a retiree upon receipt of premium transferred from the RSA, on a monthly/quarterly basis, and for a lifetime.
Under its Annuity portfolio, AIICO Insurance offers Immediate Annuity and Deferred Annuity Plans.Immediate Annuity plan allows an individual to pay a single premium to purchase an Annuity plan, after which an immediate periodic payment is made to the client either monthly or quarterly for life.
Immediate annuity shares some common features with the PenCom Retiree Life Annuity, but the source of funds is usually from the account of the individual and not the pension RSA as applicable in RLA.
Deferred Annuity is a life insurance product designed specifically for retirement, and it offers clients a fixed income from a chosen future date. It enables you to save money during your earning years, enjoy tax rebates, and earn income during your retirement.
