Aegon will guarantee to increase the income base of customers invested in its unit-linked variable annuity product every year, regardless of the underlying investment performance, as the insurer makes a raft of changes to its Secure Lifetime Income (ASLI) offering.
From 15 November, new ASLI clients will see 3.25% added to their original investment each year they do not take income.
If the underlying fund value exceeds that of the original investment, plus the accumulated annual 3.25%, the new figure is then locked in and the income base calculated from the new, higher amount.
Aegon has also made changes to the way it reviews customers' original investments.
Previously, investment amounts were reviewed on the policy anniversary date. If the investment had grown, the income base figure increased.
Under a new system, the highest recorded investment value of the fund at the end of each of the previous 12 months is taken and locked in. Aegon says the move provides investors with "12 chances instead of one" to increase the value of their investment. It also stresses there is no cap on the growth that can be locked in.
Meanwhile, Aegon has split its categories for different income levels. There are now income levels for all ages, starting with 3.6% at age 60 and increasing to 4.75% from age 79, rather than grouping income levels in brackets of five years.
"The product feature enhancements we are making to ASLI make it one of the most competitive unit-linked guarantee products in the market today," says Gordon Greig, head of individual marketing at Aegon.
"A guaranteed income is more important than ever for people as they approach retirement, given current low interest rates and stockmarket volatility but the next generation of retirees are looking for more.
"ASLI also offers control over where money is invested, the potential to benefit from stockmarket growth, and access to capital."
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