Kenindia annuity plan to offer full refund on exit

What you need to know:

Annuities are a form of investment where one gives an insurer a lump sum of cash upfront in return for regular income payments, either for a fixed period or for life.
They mostly appeal to retirees who wish to stretch their lump sum payment to cover their remaining years, or beneficiaries of large amounts of cash such as lottery winners.

Kenindia Assurance Company has unveiled a new annuity investment plan that will offer investors an option of a return of their invested principle on exit.

Speaking during the launch of its secure future annuity on Monday, Kenindia managing director Vinod Bharatan said that beneficiaries will be able to get a full refund of the invested principal upon the death of an annuity holder, unlike the case in a number of other annuity products which either pay a reduced balance on the principle or nothing.

Annuities are a form of investment where one gives an insurer a lump sum of cash upfront in return for regular income payments, either for a fixed period or for life.

They mostly appeal to retirees who wish to stretch their lump sum payment to cover their remaining years, or beneficiaries of large amounts of cash such as lottery winners.

“This annuity comes with a return of purchase price, where on death the principal is returned to the beneficiaries. We are targeting various pension schemes to suggest it to their members,” he said.

The Kenindia annuity carries a minimum entry age of 40 years and a maximum of 79 years.

The minimum investable amount has been pegged at Sh500,000 attracting a market determined fixed rate of return.

The minimum annuity instalment payable to an investor is Sh3,000, either taken monthly, quarterly, half-yearly or annually.

Investors will be able to cash out after five years, although this will attract a five per cent penalty.