A Fixed Term Annuity provides regular income for a fixed investment term that you choose in return for a lump sum investment. Term annuities are a secure investment offered by a life insurance company and operate in a similar way to a term deposit available from a bank
.
The lump sum amount invested is returned to you at the end of the fixed term or, alternatively, you can choose to have all or part of the invested amount paid back to you with the regular income payments over the investment term.

The regular income we agree to pay you and the return of the amount invested is guaranteed by us regardless of how investment markets perform – giving you peace of mind.

Snapshot
• Operates in a similar way to a term deposit available from a bank.
• You can use your super or personal savings to invest.
• You choose the fixed term of between 1 year and 50 years.
• You have the choice of monthly, quarterly, half-yearly or yearly payments.
• Your investment is repaid at the end of the fixed term unless you choose to have some or all of it repaid throughout the fixed term as part of your regular payments.
• Payments are guaranteed regardless of how investment markets perform.
• Payments are tax free if you use your super to invest.

When you invest in a Fixed Term Annuity, your investment goes into a secure fund along with the investments received from other annuity investors. This fund is known as the ‘statutory fund’, and all regular payments to our annuity investors are paid from this fund. We are also required by APRA to invest our own money into the fund. 

APRA monitors the statutory fund’s investments, the aim of which is to ensure that we can meet the promises that we have made to you. APRA is the authority that regulates the banking, insurance and superannuation industries. If at any time we do not achieve investment returns that are sufficient to cover all the promises that we have made to our annuity investors, we must cover the shortfall from the money we have invested in the fund. 

How we invest
Challenger will invest the assets of the statutory fund, subject to investment restrictions in the Life Act. Generally, the fund will be invested in cash, shares, government and corporate bonds, convertible notes,  debt instruments, geared and ungeared property investments, infrastructure investments, equities and other assets. The investment objectives for the fund include to achieve consistent returns on investment and to match the cash flow in from investment returns with cash flow out to investors so that all present and future payments can be made to all investors.