This document provides an introduction to life annuity plans. It defines a life annuity as a program that guarantees regular payments to annuity holders for life after retirement. There are two main types of annuities: immediate annuities that make payments starting immediately, and deferred annuities where payments are delayed until retirement age. The benefits of life annuities include guaranteed lifelong income, flexibility in payment amounts and timing, protection under law, and insulation from investment market volatility. The document recommends life annuities for retirees and those seeking to guarantee retirement income.

1. AN INTRO TO
LIFE ANNUITY
An introduction Guide to Life Annuity and
How to Guarantee Your Income For Life
ADEWALE FAYINKA
A Publication of

2. TABLE OF
CONTENTS
Cover Page 1
Table of Contents 2
Introduction 3-4
Immediate Annuity 5
Deferred Annuity 6
Benefits of Annuity 7
If you fail … 8
The Life for You 9
Avoid This 10
Getting Started 11
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3. INTRODUCTION
Popular research have shown that all men and women, at one time or
the other, have had need to think or agitate their minds on one or all
of the following:
The possibility of living without an end.
Comfortable lifestyle and living standards after retirement.
Being able to guarantee such high standard while they are yet
young.
However, Science is yet to provide an answer to the first proposition,
while the second and third proposition has been achieved only through
prior planning.

4. LIFE ANNUITY
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Life Annuity is defined as a program for a series of regular pay-outs
made to Annuity holders or Annuitants by an insurance company, for the
entire duration of their life after retirement, or to their nominated
dependants in the event of earlier death*
It is backed by law (PRA, 2004), and extremely flexible. A candidate for
an annuity program has the power to determine the following:
When Annuity pay-out commence.
How often Annuity pay-outs are made.
How much Annuity payment is paid to each individual.
Annuity pay-outs are usually automated, and paid directly into Annuity
holders’ accounts on pre-determined dates – monthly, quarterly or
annually.
*
Provided that the annuity plan is within the guaranteed window period. Guaranteed window period refers to
the number of years annuity pay-outs are guaranteed after the demise of the annuity holder. Payments are
guaranteed completely during the lifetime of the annuity holder.
GUARANTEED LIFE INCOME WHILE YOU CAN
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TYPES OF ANNUITY
There are different types of annuity programs, but this write-up will
be basically concerned about two types: Immediate Annuity and
Deferred Annuity.
IMMEDIATE ANNUITY
This refers to the type of Annuity program where regular pay-outs
commence immediately after issuance of the annuity contract.
Annuity pay-outs are made throughout the lifetime of the annuity
holder, or payable to dependants in the event of earlier death*.
WORKED EXAMPLES
A man aged 60 years has just retired. His pension/gratuity
payments totaled N20 million. If he chooses to invest the whole sum
into Immediate Annuity, his pay-outs will be as follow.
In line with the PRA (2004), immediate annuity is guaranteed for 10
years, and for Life thereafter.
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FREQUENCY OF
ANNUITY PAY-OUTS
ANNUITY PAY-OUTS
ANNUALLY 2,432,460.00
SEMI-ANNUALLY 1,216,230.00
QUARTERLY 608,115.00
MONTHLY 202,705.00

6. DEFERRED ANNUITY
Deferred Annuity refers to an annuity program whereby the annuity pay-
outs are deferred until the annuity holder attains his pre-determined
retirement age. The purchase money (also called premium) can be made
through regular small payments, either monthly, quarterly or annually. The
payment stops once the annuity holder attains his retirement age. This
type of annuity is ideal for young and middle aged people in
employment and in self-employments.
WORKED EXAMPLE 2
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A man aged 35 years desired to retire at Age 55. His annual salary is
N4m, but wishes to retire on a guaranteed life income of not less than
50% of his present annual salary (N2m). To buy Annuity for life, his
contributions presently is either of the following (monthly, quarterly or
annually).
PREMIUM
PAYMENT TYPE
PREMIUM
(OPTION 1)
NO GUARANTEE
PREMIUM
(OPTION 2)
5 YEARS GUARANTEE
CURRENCY N N
Single Premium 6,483,300.00 6,628,800.00
Annual Premium 385,400.00 401,400.00
Half-Yearly 197,517.50 205,717.50
Quarterly 100,204.00 104,364.00
Monthly 33,722.50 35,122.50

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BENEFITS OF LIFE ANNUITY
 Guaranteed Life-long income for annuity holders.
 Flexible program – annuity holders determine the amount, frequency,
and the retirement age.
 Protected and prescribed by Law (Pension Reforms Act, 2004).
 Purchase sum is invested in long-term high yield instruments.
 Investors are insulated from the ups and downs of the investment
markets.
 Outstanding balance in the Annuity Holders’ accounts payable to
nominated dependants* in the event of earlier demise.
 A large boost to living a longer and richer life.
OTHER TYPES OF ANNUITY
 Annuity Certain
 Temporary Annuity
 Dependents’ Annuity
WHO SHOULD BUY ANNUITY?
 All retirees or retiring persons
 Entrepreneurs and self-employed persons
 Those seeking to determine their level of income after retirement
 Those who wish to guarantee adequate income throughout their
lifetime.

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SO WHAT IF YOU FAIL TO PLAN YOUR
INCOME THROUGHOUT LIFE …
WILL YOUR RETIREMENT PLAN LOOK LIKE THIS?
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9. ASSUMING THIS LOOKS LIKE THE LIFE FOR
YOU AFTER RETIREMENT?
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TAKE OUT YOUR ANNUITY PLAN TODAY!
Guaranteed Life-long income for annuity holders.
Flexible program – annuity holders determine the amount, frequency,
and the retirement age.
Protected and prescribed by Law (Pension Reforms Act, 2004).
Purchase sum is invested in long-term high yield instruments.
Investors are insulated from the ups and downs of the investment markets.
Outstanding balance in the Annuity Holders’ accounts payable to
nominated dependants* in the event of earlier demise.
A large boost to living a longer and richer life.

10. Avoid This!
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“ When I had the money, I didn’t
have the time. Now, I have all the
time in the world, and I don’t have
the money.”
Robert G. Allen illustrating a point in “Nothing Down for the 2000s

11. Here at F2A, we advise our clients on the right type of Annuity
Plan suitable for them, help in the choice of an Insurance
company that has their best interests at heart, and stay with
them through it all to ensure that they enjoy the best Annuity
deal ever!
A Publication of
FOR A FREE NO-OBLIGATION CONSULTATION
Adewale Fayinka on +234 803 7126699; +234 909 3625979 or send an
Email to md@f2aresources.com
GETTING STARTED