Return from a life annuity

I said that the return from a life annuity from NTUC Income is likely to be 4-5% per annum.

This comprises of the following:

* guaranteed rate of 2.5% used to calculate the basic amount of the annuity
* an average bonus of 1.5% to 2.5% added to the annuity yearly (based on past records)
* total is 4-5% per annum.

The life annuity has an element of pooling of risk. Those who live longer will get a better return. Those who die younger will get a lower return.