How To Buy A Life Annuity?
10 Steps On How To Buy A Life Annuity
- Step 1. Is an annuity for you?
- Step 2. Fund Type
- Step 3. Type of annuity
- Step 4. Premium Amount
- Step 5. Annuity Details
- Step 6. Current Annuity Rates
- Step 7. Search for an Annuity Calculator.
- Step 8. Find an Annuity Broker
- Step 9. Due Diligence
- Step 10. Choose The Company
Decide if a life annuity is right for your particular needs.
Decide what type of funds you want to use.
Non-registered funds - Funds in you savings or chequing account, GIC, TFSA.
Registered Funds - Funds like your RRSP, RRIF, RPP, LIF, LIRA
Decide which type of annuity is right for you.
There are basically 3 types of annuity products sold in Canada
1. Single Life Annuity - just for you
2. Joint Life Annuity - for you and your spouse
3. Term Certain Annuity - for a specific number of years only.
Decide on the premium amount ($50,000, $100,000 etc.)
Decide when you want the annuity to start and if you would like to add a guarantee period.
Search for the current annuity rates. This will give you a rough idea of a monthly income.
For better accuracy search for an online annuity calculator that will provide a more precise figure.
Annuities are sold by insurance companies in Canada. Products like annuities can only be purchased from company agents or indepedent brokers.
Finding an indepedant annuity broker will provide you quotes from all the insurance companies in Canada.
Is the broker or agent licensed in your province or territory? Find out by doing your research.
Get a list of annuity quotes and choose the company you would like to do business with. Sometimes this means just choosing the company providing the highest monthly income.