Other Aspects: Death and Centrelink

Death of investor of a lifetime income stream

If the investor of a lifetime income stream product dies and the product is not reversionary (or reversionary and the reversionary beneficiary has pre-deceased) then the amount payable (if any – for example the investor could die after the life expectancy period) will be treated as a death benefit of the investor.

If lifetime income stream product is reversionary and the reversionary beneficiary survives the investor and the reversionary beneficiary is in retirement phase (the reversionary beneficiary has satisfied an unrestricted release condition in their own right) at the date of death of the investor – the product can transfer to the reversionary beneficiary but there is no recalculation of the maximum product payout.

Centrelink treatment of lifetime income streams

The Centrelink treatment of these products have not, as yet, been resolved by the Government.  Consequently and understandably, potential product issuers are reluctant to lifetime income stream products while the Centrelink treatment has not been resolved.