Category Retirement
SUB CATEGORIES General |  Savings & Investments |  Annuties | 

Stretching the retirement cents further

24 November 2020 Liberty

Liberty's Living Annuity is designed to respond to the needs of the client in a flexible way, offering them both a range of choices and solutions to make their retirement more stress free, while optimising their finances in current markets.

It's well-known that medical advancements, together with healthier diets and lifestyles, mean people are living longer, which brings an increased risk of clients outliving their retirement savings. There's also the added complication that investment markets, traditionally a safe haven for the retirement pot, are becoming more volatile.

Liberty has redesigned and updated its offerings to cope with these trends in investment markets and changes in retirement lifestyles.

"Today’s economic climate is more challenging than ever due to its effect on the investment markets and the cost of living. The idea is that we can now offer the features and benefits clients find the most valuable and offer them as stand-alone add-ons," says Henk Appelo, Liberty Investment Product Developer.

The Liberty Living Annuity, formerly known as the Liberty Bold Living Annuity, has been redesigned with the core idea being to offer more choice to clients, while simplifying existing ones.

One of the features is its Income Enhancer Benefit. This is designed to provide an additional layer of security against the client running out of money.

"Clients have the option to commit a percentage of their investment to a bonus pool
when they pass away. In exchange, they will receive a bonus pay out when other contributors pass away. In essence this benefit enables individuals to get bonuses as they grow older to help offset living longer than expected and potentially running out of money," says Appelo.

"This means that if they have two or more qualifying Liberty investments, we will group their combined investment values to reduce the overall platform fee. The higher the combined value of their investments, the lower the aggregated platform fee," explains Appelo.

The Living Annuity maintains its High Water-Mark Guarantee optional feature which lets clients
invest more aggressively with the aim of enjoying higher potential returns, whilst keeping downside risk at bay.

"A High-Water Mark Guarantee protects your investment from falling by no more than 20% of the highest value reached at the end of every three months. It is based on the value of your investment at the end of every quarter. If at this point your investment has reached a new high, your guarantee increases to take this into account. So you can lock in your growth and protect against drops. Even if the markets go down, your investment is protected, thus creating a safety net during market downturns," says Appelo.

"Financial Advisers and Fund Managers are always looking for fresh strategies to accommodate the retirement realities of clients. With the Income Enhancer Benefit and High-Water Mark Guarantee options, you can tailor a policy in a number of ways to ensure that your client can benefit from growth and the full value of their investments in the long-term," he says.

Quick Polls


How to give affordable and appropriate financial advice to the low income market segment. There is little room on a R50 pm policy for advisers to be remunerated for the time it would it would take to educate & fulfil admin function. What is the solution?


[a] Eliminate non-advice sales / telesales
[b] Implement industry standards for non-advice information
[c] Introduce an insurer-funded pro-bono advice network to low income earners
[d] Reinforce the Policyholder Protection Rules
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