At the core of the FUSP campaign is a clear and concise manifesto:


•    Clients entering into a USP automatically receive a whole of market guaranteed annuity quote which if appropriate takes account of any medical condition. If a Guaranteed Annuity Rate applies, then it is always used if better than the whole of market best rate.

•    The best rate obtained, or guaranteed rate is used to calculate the critical yield on a type A* basis


•    The critical yield generated is always to be quoted to clients – and is to be recalculated at each review, based on a current whole of market annuity rate which takes account of any changed medical circumstances and any guaranteed annuity rates available.

 

*The critical yield is the annual  return required on the drawdown fund to enable the client to draw the annual income they could have obtained from an annuity at outset –the higher the annuity rate the higher the critical yield and therefore risk of drawdown). Without proper rules it is not in an insurer’s interest to use a high annuity rate as it makes USP look risky


 
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