Annuity

!!!sharon!!_2

Can someone please tell me what an annuity is and how it affects me - my mum recently passed away and Canada life have got in touch with me about an annuity forgive me but I have no idea what it is I know it's something to do with her pension have tried to find out on the internet but no joy - can someone please shed some light on this

JoeCrystal

You may be better off posting on this forum instead. Hardly anyone look into this sub forum.

LINK TO MAIN FORUM

LHW99

Sorry for your loss.
Until fairly recently, many people automatically bought an annuity with the money from their works pension.
The money saved in the scheme was handed over to an insurance company who then paid a (usually) monthly income generally for the rest of the person's life, however long or short that was.
Some annuities however would guarantee to pay out for a minimum of say 5 or 10 years, if they were set up that way at the start. So if someone passed away after a couple of years, their estate would be paid the remaining amount of that guarantee.
There is also the possibility that if the annuity was set up to pay, say, monthly "in advance" and for example a payment was made on the 3rd, but the person unfortunately passed away on the 6th, then most of that month's payment would have to be returned.
Or if paid "in arrears" a small balance could be due to the estate.

Silvertabby

My sympathies.

As LWH99 sayes, it could be that your mum was overpaid and CL want the money back - but it could also mean that if she died within a certain time of starting to draw the annuity - and if she opted for a guarantee period - then there may be some money due to her estate. Only way to find out is to ring them.