How to get a guaranteed pension that lives on after you've died However, there's a catch. Because these annuities don't currently offer the best rates. Currently there are only five companies offering value protected annuities, and only one of these (Canada Life) offers the protections on standard annuities, which are policies for people without health complaints. This lack of competition means Canada Life offers a relatively poor rate that's 7pc lower than the best rate for a £100,000 purchase. Fidelity research conducted in October showed Hodge Life offered the best rate for a £100,000 lump sum at £6,024 a year, while a 100pc value protected policy from Canada Life would pay £5,596 a year. This means someone who wants 100pc value protection, will have to accept a pension income 7pc lower than the best rate to get it. Retirees in poor health also have to pay a premium if they want value protection, but they are more likely to benefit from the guarantees as they are less likely to live to the point at which the protection would be worth nothing. The research shows a 65-year-old male who is overweight and has high blood pressure and high cholesterol could swap £100,000 for a single life level annuity from Just Retirement worth £6,593 a year. They could add 50pc value protection in return for a 1pc income reduction, which would reduce their income slightly to £6,537 a year. However, if they wanted 100pc of their fund protected, their income would reduce to £6200, 6pc less than the rate with no death benefits. And, if someone has severe health problems, they will pay a much higher premium for value protection. If the 65-year-old male had also had a heart attack, Just Retirement would offer him £7,130 a year for a single life level annuity. On top of this, 50pc protection would cost 2.5pc of the fund as the rate would fall to £6,950, while having 100pc protection reduces the rate much further, by 14pc to £6,119 a year. This drastic income reduction is reflective of how likely someone who has had a heart attack to die early, and thus deprive their family if they bought a headline enhanced annuity, according to Alan Higham, head of retirement at pension firm Fidelity. However, Mr Higham says value protection is like having "cheap life insurance," and if more pension providers start offering them from April, he expects deals to get cheaper, meaning people woudl have to give up less income to get them. Billy Burrows, associate director at Key Retirement Solutions, says value protected annuities could be a particularly good option for "middle" savers who don't have enough money to leave a huge inheritance, but have just about enough to see them through. He said: "They are not that expensive and it also provides lump sum death benefit that now looks much more appealing because of the death tax changes." According to figures collected by Mr Burrows, a 60-year-old with a £10,000 pension pot could buy a 100pc value protected annuity their inheritance would decline from £95,463 aged 66 and would completely run out by the time they reach 83. If they took the same income from a drawdown plan with a 3pc yield, the inheritance they could bequeath in the first year would be £98,102. This would reduce over time but would hold its value better than the protected annuity, leaving an inheritance pot of £30,601 aged 83.