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Pension annuity

Pension annuity

Guaranteed payments on continuous basis after reaching retirement age

  • Possibility to ensure income – the periodic monthly payments within the remaining lifetime
  • The specified periodic payments may remain identical to the previous payments or increase if the insurance company distributes profit, and the payments will not decrease

The pension annuity is a service offered by the life insurance company: the Insured after payment of one-off premium will receive monthly payments within the remaining lifetime.

Seeking to prevent threats that the accumulated savings will be insufficient after reaching retirement age, you may obtain the pension annuity for a portion of savings and the periodic monthly payments will be guaranteed within the remaining lifetime.

The pension annuity service is offered by AB SEB gyvybės draudimas. Two types are offered:

  • standard pension annuity without a guaranteed payment period. In case of death of the Insured who receives the periodic payment of the pension annuity, the agreement will expire and no one will receive payment;
  • pension annuity with a guaranteed payment period (5, 10 or 15 years). In case of death of the Insured who receives the periodic payment of the pension annuity prior to expiry of the guaranteed payment period, the beneficiaries nominated under the agreement (or legitimate heirs) will be paid out a one-off insurance benefit.

How to guarantee payments for lifetime?

Consider the amount to be allocated

We recommend obtaining the pension annuity in such case if you have accumulated solid amount of funds and are willing to receive payments on monthly basis for lifetime. You will always know your monthly income, and you will not have to worry that your life savings will be spent in a short period.

Seeking to consider the portion of savings necessary for obtaining the pension annuity, it is important to plan and to allocate funds for any unforeseen life events. The pension annuity will guarantee your stable monthly income, however if a larger amount is necessary, you will not have a possibility to terminate the pension annuity agreement.

Consider who will pay for acquired annuity

A one-off premium for accrued annuity may be paid by several payers:

  • management company of the 2nd pillar pension funds if you acquired a right to receive the 2nd pillar pension fund payment
  • management company of the 3rd pillar pension fund, if you accumulated savings in its pension fund
  • you or your close relatives  –  from independently accumulated savings, from sold assets or business, or from the obtained inheritance, etc.
  • employer or other persons.

One-off insurance premiums:

  • will not be subject to any tax if the insurance premium is transferred by you, other persons or by the management company of the 2nd pillar pension fund
  • may be subject to tax if the insurance premium is transferred by the management company of the 3rd pillar pension fund, employer, other legal entities

Note:  Tax environment may change in future.

Select the pension annuity type

We recommend selecting the standard pension annuity without the guaranteed payment period if: We recommend selecting the standard pension annuity with the guaranteed payment period (5, 10 or 15 years) if:
  • if you have no dependents
     
  • own other assets, thus in case of your death, your close relatives do not experience financial problems
     

  • you are willing to receive a larger monthly payment
     

  • you have dependents and do not own other assets
     
  • you plan to receive more income per month, compared to your expenses, or if other assets owned by you are sufficient
     
  • the issue of inheritance is more important for you than monthly income to be received by you
     

Amount of pension annuity to be received

The initial pension annuity proposal to you depends on:

  • your age and the expected duration of life
  • amount of premium
  • selected guaranteed payment period
  • interest rate
  • agreement administration costs

To receive a proposal, please contact representatives of AB SEB gyvybės draudimas.


This is promotional information about services offered by AB "SEB gyvybės draudimas", and it cannot constitute any basis or part of any subsequent transaction.

Important to know:

  • after entering into the pension annuity agreement, you will not be allowed to change the annuity type, the guaranteed payment period, insurance premium amount or the premium payer
     
  • you will have a right to unilaterally terminate the agreement by giving written notice to the insurance company within 30 days from the insurance policy receipt date. Later on, you will not have an opportunity to terminate the agreement or to receive a refund
     
  • after the effective date of the agreement, payers have no rights to such funds
     
  • pension annuity payments may not decrease. Payments may only increase if the insurance company distributes the profit generated from the pension annuity activity if:
    – return on investment under the pension annuity agreements exceeds the forecasted interest income
    – portion of the planned pension annuity payments were not paid out. A non-disbursed payments may accrue, if life duration of the insured persons, who signed the pension annuity agreement, differs from the expected life duration
    – carried losses of former periods do not exceed the generated income

    If the above terms are implemented, a portion of the generated profit to be distributed to the pension annuity service recipients will make at least 50 per cent. The above portion of the profit will be distributed individually by each effective pension annuity agreement. Periodic pension payments to be paid in future will be increased by the allocated portion of the profit starting from May of the current year.

    The pension annuity payment may not increase, or increase at a slower pace, compared with the purchasing power of money, therefore the risk exists that in the long-term you will be able to buy a smaller number of goods or services for the amount received each month
     
  • periodic payment to be received every month will not be subject to any tax
     
  • you may nominate, change or revoke the beneficiaries, if the guaranteed payment period is selected.

This is promotional information about services offered by AB "SEB gyvybės draudimas", and it cannot constitute any basis or part of any subsequent transaction.

Premium payment terms

Only payers specified in the application of pension annuity agreement have a right to pay one-off insurance premiums:

  • pension savings company (engaged in management of the 2nd and 3rd pillar pension funds). The insurance company will provide information to the pension savings company about signature of the pension annuity agreement, and the pension savings company will transfer  funds within the term specified in acts of law
  • you, your employer, other private individuals or legal entities. You will have to inform the payers about the signed pension annuity agreement and payable insurance premium, and the payers have to pay the premiums within 60 days from the insurance policy issuance date
    We would like to draw your attention that if you have accumulated financial assets, for instance in a deposit account, under the unit-linked life insurance agreement, in investment funds, etc. you will have to withdraw your savings yourself and to transfer a one-off insurance premium

If at least one insurance premium payer fails to timely pay the premium, the pension annuity agreement will not come into effect. In such case, the paid insurance premiums (or a portion thereof) will be returned to the payers. You will have a possibility to contact us again and to sign another pension annuity agreement (however the insurance company’s proposal may differ from its former proposal).

Benefits in case of the Insured’s death:

  • If all insurance premium are timely paid, however the first pension annuity payment is still unpaid, all received premiums will be transferred to the beneficiary (or to legitimate heirs)
  • If the Insured died within the guaranteed payment period – the payable amount of the pension annuity from the date of the Insured’s death until the maturity date of such period will be transferred as the one-off insurance benefit to the beneficiary (or to legitimate heirs)
  • If the Insured died after expiry date of the guaranteed payment period or if the guaranteed payment period was not selected, the insurance benefit will not be paid out

Insurance benefits in case of death will not be subject to any tax, if the benefit is received by the beneficiaries, however may be subject to the inherited property tax, if the benefit is received by legitimate heirs.

Note. Risk exists that tax environment may change in future.


This is promotional information about services offered by AB "SEB gyvybės draudimas", and it cannot constitute any basis or part of any subsequent transaction.

Contact

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