The BMO is getting into the life annuity business, or so it would seem,with their introduction of the Lifetime Cash Flow Plan.
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So,first of all,does it have the guarantees of a life annuity,where a life insurance company is required to maintain reserves to make the payments? And those payments could be payable for a longer time than even 10 years ago, as people are kept alive longer with drugs and new treatments.
The next question to answer is how do we define a life annuity? If this Lifetime Cash Flow plan is paying you for life,isn,t that a life annuity?
Or is it a mutual fund with a promised and guaranteed return? So in that case it is a segfund.
It seems that the banks are trying to go in the direction of guarantees,while 2 life insurers are now issuing cashable annuities, getting away,to some extent,from the guaranteed life annuity.
Once a person decides to start using their funds to enjoy their retired life,each will have to decide on a life annuity or some product like this Lifetime Cash Flow plan.We,ll watch the clash of interests between the big boys and hope that the consumer wins.