Questions You Should Ask Before Buying A Life Annuity

Figure 1. Questions

Questions About The Annuitant

  • Should it be a single life annuity on my life alone, even though my partner/spouse is about the same age?
  • Should it be a joint life annuity with my spouse or partner so each is guaranteed an income for life?
  • Should the capital be divided between a single and joint life and, if so, in what proportion?
  • I am older than my partner/spouse. Should I consider only a single life annuity; perhaps with a guarantee to age 90?
  • Should I use all my capital now for an annuity or keep some for a later date?
  • How much income will I lose if I delay the purchase for a year?
  • Should I wait until I am 71 to buy a registered life annuity?
  • Won’t I get more income if I wait at least another year?

Question about the owner of the annuity policy

  • As my life annuity will be unregistered, who should be the owner?
  • Would it be better to have joint owners?
  • Should the beneficiary be the owner?
  • Can my child or other relative be a joint owner in order to guarantee a life income for him or her?
  • Can a charity be the owner and/or beneficiary?

Question about the guarantee period option

  • How long should the guarantee period be?
  • Should I have two or more annuities with different guarantee periods?
  • Do I need a guarantee period at all?
  • What is the income difference for my age, between a zero year, 10 year and a 20  year guarantee?
  • What is the advantage/disadvantage of a long term guarantee?
  • As I don’t want to take any risks, should I divide my capital between a RRIF and an annuity?
  • Will I ever be able to change my life annuity?
  • As I may need more income at certain times, should I also buy a RRIF?

Questions about your children

  • Should I consider the financial situation of my child or children when buying this life annuity?
  • How can my child or children benefit from my annuity payments?
  • Should a child or children be made co-owners of my non registered annuity?

Questions on the beneficiaries

  • Should my beneficiary be my spouse/partner or my estate?
  • Do I need to alter my Will because of this proposed annuity?

Questions on the annuity payments

  • Is it better to take monthly or annual payments?
  • Is there any reason to delay taking payments?
  • Would monthly or annual payment be better for me?
  • Can I divert the payments to another person for a certain period of time?

Questions on the annuity quotes

  • How can you know which company is offering the best annuity rate?

The Hughes Trustco Group will answer your questions and provide you with a life annuity quote from each Canadian company quoting on your case. We represent all the companies; we do not favour one company over the other.


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