AIICO Insurance Plc has reiterated its commitment to providing a robust annuity business that meets customers’ expectations as well as drives the growth of insurance in the country.
Insurance is doing everything possible to deepen annuity business in Nigeria, in order to take advantage of its inherent opportunities.The AIICO Insurance boss, who described annuity business as a game changer for everybody, noted that, the the company is committed to a robust and effective annuity service.
He noted that a lot still need to be done to deepen the business in Nigeria, adding that ‘we are not there yet, but step by step, we will get there.’
While emphasising the importance of the collaboration between AIICO
Insurance and NAIPCO, he said: ‘’our partnership with you as journalists, especially in respect of today’s training on Annuity is an indication of our commitment to the growth of this business.’’
He disclosed that AIICO has strategically repositioned her Annuity department for effectiveness and growth.
Speaking on the theme of the training, which is, ‘Understanding Annuity Business,’ Senior Manager, Business Development, AIICO Insurance, Victor Owotorose, stressed the importance and benefits of annuity to clients and the growth of insurance industry.
According to him, a deferred annuity has an accumulation phase followed by a disbursement (annuitisation) phase; while an immediate annuity converts a lump sum into cash flows from day one.
Owotorose said, annuity can be bought with either a lump sum or a series of payments contributed over time, adding that, annuities come in three main varieties—fixed, variable, and indexed—each with its own level of risk and payout potentials.
According to him, the income receive from an annuity is typically taxed at regular income tax rates which are usually lower unlike when calculated with long-term capital gains rates.
and, in return, receive regular disbursements, beginning either immediately or at some point in the future, he stated that the goal of an annuity is to provide a steady stream of income, typically during retirement.
‘’Many aspects of an annuity can be tailored to the specific needs of the buyer. In addition to choosing between a lump-sum payment or a series of payments to the insurer, you can choose when you want to
annuitize your contributions—that is, start receiving payments. An annuity that begins paying out immediately is referred to as an
immediate annuity, while one that starts at a predetermined date in the future is called a deferred annuity.”
‘’The duration of the disbursements can also vary. You can choose to receive payments for a specific period of time, such as 25 years, or
for the rest of your life. Of course, securing a lifetime of payments can lower the amount of each check, but it helps ensure that you don’t
outlive your assets, which is one of the main selling points annuities.
‘’Annuities come in three main varieties: Fixed, variable, and
indexed. Each type has its own level of risk and payout potential. For any of these, it is often structured as a deferred annuity,’’ he explained.
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