Life Annuity Definition

From Wikipedia, the free encyclopedia

By Ivon T Hughes
Figure 1. Wikipedia

Definition of a Canadian Life Annuity

This is a definition of "life annuity" that I wrote on April 2nd, 2013 for Wikipedia, the free encyclopedia.

It sets out the basis of why life annuities are beneficial. Today with conflicts all over Africa, the Middle East, Korea and other hot spots, people are looking for security.

And not only physical security, but financial security. Here in North America with zero interest rates and volatile stock markets, it is hard to know whom or what to trust. A life annuity with its absolutely guaranteed payments from a conservative 100 plus years old life insurance company, is the basis for your wealth management.


Wikipedia - Life Annuity


In Canada the most common type of annuity is the life annuity, which is normally purchased by persons at their retirement age with tax-sheltered funds or with savings funds. The monthly payments from annuities with tax-sheltered funds are fully taxable when withdrawn as neither the capital or return thereon has been taxed in any way. Conversely income from annuities purchased with savings funds is divided between the return of capital and interest earned, with only the latter being taxable.

An annuity can be a single life annuity or a joint life annuity where the payments are guaranteed until the death of the second annuitant. It is regarded as ideal for retirees as it is the only income of any financial product that is fully guaranteed. In addition, while the monthly payments from registered funds are for the upkeep and enjoyment of the annuitants, any guaranteed payments on non-registered annuities are continued to beneficiaries after the second death. This way the balance of the guaranteed payments supports family members and becomes a two-generation income.

Wikipedia Contribution

Phil Barker

About the Author

Phil Barker

Phil Barker is a leading expert on life annuities in Canada. has different financial products and has been a recognized authority since 1972.

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