How To Buy A Life Annuity?

10 Steps On How To Buy A Life Annuity

• Step 1. Is an annuity for you?

Decide if a life annuity is right for your particular needs.

• Step 2. Fund Type

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

• Step 3. Type of annuity

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.

• Step 4. Premium Amount

Decide on the premium amount ($50,000, $100,000 etc.)

• Step 5. Annuity Details

Decide when you want the annuity to start and if you would like to add a guarantee period.

• Step 6. Current Annuity Rates

Search for the current annuity rates. This will give you a rough idea of a monthly income.

• Step 7. Search for an Annuity Calculator.

For better accuracy search for an online annuity calculator that will provide a more precise figure.

• Step 8. Find an Annuity Broker

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.

• Step 9. Due Diligence

Is the broker or agent licensed in your province or territory? Find out by doing your research.

• Step 10. Choose The Company

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.