What this comparison covers

A life annuity exchanges retirement capital for income under an insurer’s contractual terms, commonly for the annuitant’s lifetime and potentially with spouse continuation, a guarantee period or escalation. The calculator accepts two quoted starting incomes and escalation percentages. It does not estimate longevity or price mortality risk.

Only compare quotes for the same purchase capital and commencement date. If one quote uses more capital, its higher income may not be a better rate. Preserve the insurer, product name, option set, quote date and expiry beside each input.

Initial income rate

Initial annual income rate is monthly income times twelve divided by purchase capital. It is a cash-flow ratio, not an investment return that leaves the original capital available. Once a conventional guaranteed life annuity is purchased, access to capital and death benefits follow the contract.

A higher initial rate can reflect no escalation, shorter guarantee, no spouse continuation, older age, health underwriting or different market rates. Do not compare it with a living-annuity drawdown as though risks and ownership are identical.

Level and escalating income

A level annuity pays the same nominal amount under the quoted option. An escalating annuity starts lower but increases by a fixed percentage or another defined basis. The calculator uses fixed annual compound escalation from each entered rate; an inflation-linked or with-profit annuity follows different rules.

Ask when the first increase occurs and whether it is guaranteed. The script treats year one as the starting income and applies nine increases to show year ten. A quote escalating on another anniversary or in arrears can differ slightly.

Inflation-adjusted year-ten income

Nominal income is divided by compounded assumed inflation to express year-ten monthly income in today’s purchasing power. A level R14,500 can buy less after nine years of inflation, while a 5% escalation can broadly preserve purchasing power if inflation is close to 5%.

Inflation is uncertain and a household’s medical, food and housing costs can rise differently. Test several scenarios. A real-value comparison is more informative than looking only at year-ten nominal rand, but it still does not value survival probabilities or death benefits.

Ten-year payment total

The calculator adds twelve monthly payments for each of ten years, increasing each year’s monthly amount by the entered escalation. It does not discount future money and assumes payments continue for the whole ten years. It is therefore an arithmetic cash total, not actuarial present value.

A life annuity’s core value is income for however long covered lives survive, which may be shorter or much longer than ten years. Do not rank lifelong products from a fixed ten-year total. Use the line to understand the early cash-flow trade-off only.

Guarantee periods

A guarantee period can continue payments to nominated beneficiaries or an estate for the remaining guaranteed term if the annuitant dies early, subject to contract. It usually reduces starting income compared with an otherwise similar no-guarantee quote because the insurer may pay for longer.

Enter income from quotes with the same guarantee when making a clean comparison. The page has no field that values a guarantee because its expected value depends on mortality, payment terms and beneficiary needs. Read the death-benefit wording, not just the number of years.

Spouse and dependant continuation

A joint-life annuity can continue a percentage of income to a surviving spouse or dependant. A 75% continuation and a 100% continuation provide different protection and starting income. Age and health of both covered lives influence pricing where applicable.

Confirm whose death triggers each change, whether escalation continues and whether a guarantee overlaps. The higher single-life quote can expose a surviving partner to a severe income fall. Household affordability after either death should be modelled before selection.

Medical underwriting and quote validity

Some enhanced annuities consider health or lifestyle information and may offer higher income when expected longevity is shorter. Complete disclosures accurately and follow the provider’s evidence process. An online generic rate cannot reproduce individual underwriting.

Annuity rates change with market conditions and quotes expire. Compare formal quotes issued on the same day where possible. Do not rely on a screenshot without insurer identity, option terms and expiry, and do not transfer capital to unverified bank details.

Life annuity versus living annuity

A living annuity keeps assets invested and allows an income drawdown within regulatory parameters, so income and residual capital depend on returns, fees and withdrawals. It does not guarantee a regular income for life. A life annuity transfers investment and longevity risk differently under insurer promises.

Blended strategies can be possible. The choice depends on essential expenses, flexibility, legacy goals, risk tolerance, other income and health. This quote comparator covers only two guaranteed-income cash flows and should not be used to select an annuity category without advice.

Advice and insurer checks

Verify that the adviser, financial services provider and insurer are appropriately authorised through official FSCA channels. Ask for fees, commission, replacement consequences, complaints process and a written record of advice. Guaranteed income depends on the insurer’s contractual promise and regulatory framework.

Give the adviser a household budget, spouse needs, debts, medical costs and other pensions. Ask them to explain why a recommendation remains suitable under higher inflation and longer life. Take time to read the policy; annuity purchase decisions can be difficult or impossible to reverse. Compare the formal policy wording with the illustration, record every assumption used, and ask how tax will be withheld from payments. Nomination forms, banking details and identity documents should be submitted only through verified channels. A trusted family member can help review continuity arrangements without replacing regulated advice.

File a like-for-like quote record

Keep both formal quotes with purchase capital, commencement date, annuitant details, escalation basis, guarantee period, spouse continuation, fees and expiry date. Ask the adviser to reconcile every difference before comparing income. Re-run the illustration when market rates or personal details change because an old quote may no longer be available.