5 for Life from AEGON Scottish Equitable International

What type of guarantees does 5 for Life offer?

The most important guarantee is the income. We’ll pay a minimum guaranteed income of at least 5% of the initial investment every year for life, or for as long as your clients want it. If they take additional withdrawals this will reduce the minimum guaranteed income.

5 for Life also offers two other guarantees. A money-back guarantee on death or if the plan is cashed in after the tenth anniversary.

Can the income rise or fall?

The future income and income escalator features mean that if the market rises and the plan value goes up, the guaranteed income amount could go up too.

The minimum guaranteed income of 5% won’t fall because of poor investment returns. However, taking additional withdrawals from the plan will affect the guarantees and the future income and income escalator features.

Please remember although we guarantee the income, the value of the fund isn’t guaranteed and could fall to zero.

What fund choice is available?

There are three different investment approaches.

• Core portfolios - a mixture of our UK Fixed Interest fund and the UK Index Tracker fund
• Multi-manager portfolios - a mixture of equities selected by Morningstar from our life fund range and the UK Fixed Interest fund
• Create range - a group of sector funds from some of the leading funds managers, including a Cash fund to lock in gains.

How is the income taxed?

The income guarantees mean that payments can be returned, that are in excess of the value of the investment. This means it’s taxed as an annuity rather than a bond. Part of every income payment represents a tax-free return of capital as is fixed throughout the lifetime of the income payments. The balance of the income is subject to tax, if any.