Table of Contents
Annuities explained
An annuity gives you a guaranteed regular income for life, or for a term you choose.
How does an annuity work?
If you’re 18 years and older you can use your personal savings to invest in an annuity. If you’re using some of your super to invest, you must be aged 60 or over and have unrestricted access to your super.
Choose how long you want to invest
You can choose an annuity that provides income for your lifetime, or you can choose to invest for a fixed term.
Invest a lump sum
You can invest some of your super or savings with Challenger.
Receive guaranteed regular payments
We pay you guaranteed regular payments for as long as you live, or for the period you choose.
Types of annuities
Challenger offers two types of annuities, Lifetime and Fixed term.
Challenger Lifetime Annuity | Challenger Guaranteed Annuity | |
|---|---|---|
| What it delivers | Delivers guaranteed regular income payable for life, regardless of how long you live | Delivers guaranteed income payable for a fixed period you choose |
| Income | Guaranteed regular income for life; and your spouse’s life if you choose | Regular income for a fixed term |
| Term | The entire lifetime of the policy holder | 1 to 5 years |
| Payment options |
| Fixed payments |
| Payment frequency | Monthly | Monthly or yearly payments for terms over one year |
| Lump sum access | Available during a withdrawal period based on life expectancy | Initial investment repaid at the end of the term. Fees will apply for withdrawal before the end of the term |
| Death benefit | Lump sum payable to estate or beneficiaries during a period based on life expectancy | Not specified |
| Tax benefits | Tax-free payments if invested with super money | Not specified |
| Minimum investment amount | $10,000 | $10,000 Can only use non-superannuation savings to invest |
| Additional options | Index options (for market linked payments) Deferred payment option Accelerated payment option | Longer terms, and the ability to invest with super monies are available through our Challenger Guaranteed Annuity (Fixed Term) |
Read important information: This table is a brief summary only. Full information on product features is available in the PDS |
Why consider a Lifetime annuity?
Retirement is life-changing. As you adjust to your new lifestyle, you’ll need to think differently about your finances. Moving from earning an income to drawing on your retirement savings can be a big shift mentally. And it can bring up financial concerns you haven’t thought too much about before, such as:
- the risk of outliving your retirement savings and becoming completely reliant on the Age Pension
- the impact of market conditions on the value of your investments during your retirement
- the risk that over time inflation can increase your cost of living. This means the income received from your investments may also need to increase in line with inflation to maintain your standard of living.
Lifetime annuities can help to address these concerns so you can relax and enjoy your retirement.
Features of Challenger's lifetime annuity
Make your retirement income last
Challenger’s Lifetime Annuity' (Liquid Lifetime) will pay you a guaranteed regular income for life, helping to give peace of mind in retirement.
Helping you to spend confidently in retirement
Annuities can be used to help cover your living costs and maintain your standard of living in retirement.
Protection against key retirement risks
Lifetime annuities give you an additional layer of protection for life. They can act as a safety net.
Potential to get a boost to your Age Pension
Access an immediate Age Pension boost if you are an asset tested part pensioner, because only 60% of the amount invested into a Challenger lifetime annuity counts towards the relevant Centrelink/DVA assets test.
A guaranteed death benefit
A guaranteed death benefit is payable for the duration of your life expectancy, up to a maximum of 27 years. The death benefit equals 100% of the amount invested for the first half of the death benefit period (rounded down to a whole year) and we don’t reduce the death benefit for any income that has already been paid to you.
Why consider a term annuity?
Challenger’s Fixed term annuity is a secure investment offered by a life insurance company that operates in a similar way to a term deposit2. Payments are guaranteed by Challenger regardless of how investment markets perform.
Features of Challenger's term annuity
Fixed return
Know what you’re earning. Enjoy the certainty that your income won’t be impacted by the performance of the share market.
Choice of terms and payment
Select from a range of terms and income payment options all delivering guaranteed payments for the term you choose.
Nominate beneficiaries
Keep control over your estate planning by nominating one or more beneficiaries.
Competitive rates
View our competitive rates here.
No fees
There are no fees or charges payable to us.
Access your investment early if you need it
If your circumstances change, you can access a lump sum amount early. Bear in mind that a Challenger fixed term annuity is designed to be held until the end of the term. If you decide to withdraw early, a penalty will apply.
Frequently asked questions
We have compiled a list of questions our customers ask us about annuities. We have shown the most common questions, you can also view all frequently asked questions.