What you need to know:
- A typical annuity plan is a life insurance product that provides a guaranteed income stream for a specified period or the rest of one's life. In Uganda, annuity plans are becoming increasingly popular among people who want to secure their financial future in retirement.
For Lukiiya Nalwadda, retirement was always a looming concern. As a former secretary at the main library of Makerere University, she had worked tirelessly for 40 years, but she was always worried about what would happen when she eventually retired from her job.
She had a large family to take care of, including her husband who had been ailing for a while and required constant medical attention. With no reliable source of income after retirement, Lukiiya's future was uncertain.
Following the advice of her friends to save continuously, and the enviable benefit of being a part of a good employer with a retirement plan, Lukiiya had managed to accumulate a decent sum of savings over the years.
However, she was not sure how to go about keeping the money safe, while at the same time ensuring she has enough to meet the day-to-day cash requirements. With little knowledge of the financial markets, she was hesitant to make any investments that could potentially lead to losses.
Lukiiya is not alone in her situation. Every year, hundreds of Ugandans reach retirement age without a reliable monthly source of income after leaving their jobs. Many, like Lukiiya, are unsure about how to make the most of their savings and plan for their financial future.
According to the Annual Retirement Benefits 2021/22 by Uganda Retirements Benefits Authority (URBRA), only slightly more than three million (3.01 million) have retirement benefits arrangements, majority of whom are private formal sector workers covered under the Sector National Social Security Fund (NSSF), leaving the majority vulnerable to financial insecurity in their later years.
This is a worrying trend that can be attributed to the decline in traditional pension plans, longer life expectancy and inadequate savings, according to experts .
Thankfully, there are now options available to help people like Lukiiya plan for retirement; one of which is the ICEA Annuity plan that provides a guaranteed income for life in retirement.
A typical annuity plan is a life insurance product that provides a guaranteed income stream for a specified period or the rest of one's life. In Uganda, annuity plans are becoming increasingly popular among people who want to secure their financial future in retirement. According to the Annual Insurance Market Report 2021, the insurance industry witnessed some moderate growth. Gross written premiums (GWP) grew at an annualized rate of 11.12 percent from Shs1,065 billion in 2020 to Shs1,184billion in 2021. Life insurance business on the other hand generated Shs 397.12 billion in GWP in 2021 (up from Shs 324.35 billion in 2020) representing a 22.44 percentage growth in premiums.
The ICEA Annuity plan is an attractive option for those looking for financial security in retirement, as it eliminates the risk of outliving one's savings or facing financial uncertainty due to market fluctuations. It also provides the critical buffer against any shocks that may hit the investment options a retiree may consider – as the risk is solely borne by the insurer.
Akin to the infamous movie series – 1000 ways to die, losing your life’s savings is seemingly a sure way to cut life short, and while at it, miserably.
One must therefore, strive to secure their income in retirement. And the one sure way to secure your retirement is through insurance company annuity plan.
ICEA say their Annuity Plan dubbed The PLAN is customizable, allowing retirees to choose the level of income they need and the frequency of payouts. This flexibility makes the plan suitable for a wide range of retirees, from those who want a modest income supplement to those who need a more substantial income stream to maintain their standard of living – without having to sweat it out.
The ICEA Annuity Plan is backed by ICEA LION Life Assurance, one of the strongest and most stable insurance companies. It has a long history of providing insurance and financial products to individuals and businesses in East Africa and has earned a reputation for financial strength and stability for over a century in East Africa.
"The Annuity Plan is intended to transform the usual culture of people retiring and getting lump sums of money to invest it without experience, which leads to loss of these savings. The ICEA annuity plan means that money is mobilized and invested by professionals who assure the retiree of a guaranteed sum in constant payments," says Mr Ibrahim Lubega Kaddunabbi, the chief executive officer Insurance Regulatory Authority.
It is essential to note that the benefits of annuity plans vary depending on the type, duration, and other factors. However, with the right annuity plan, retirees can secure their financial future and enjoy peace of mind.