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    Categories: Retirement

How does an annuity work?

With an annuity, you provide either registered or non-registered funds to an insurance company and the insurance company will pay you a monthly or annual income for the rest of your life (no matter how long you live). You can continue the income for your spouse or partner after you die by using a joint life annuity.

Step 1: Request an annuity quote

You request an annuity quote by completing our annuity form. Some details will be requested such as the amount you wish to invest, type of funds (registered or non-registered), gender, date of birth, guarantee period, and single or an joint annuity.

Step 2:  Annuity Comparison Survey
You will then receive a list of the top insurance companies providing you with the best monthly income.

Step 3.  Completing an annuity application.

After reviewing the annuity survey the top insurance company providing the best income is normally chosen. Then an annuity application will then be completed.   If the funds are registered then a government transfer form (T2033) will also be completed.

Step 4. Required documents

The following items need to be returned to us in order for the annuity policy to be issued.

1. Signed annuity application
2. Copy of I.D. such as driver’s license or passport page.
3. Void cheque in order to receive your monthly income
4a. If the funds are non-registered: a cheque payable to the insurance company
4b. If the funds are registered: a signed transfer form will be needed

Step 5. Your annuity policy is issued.

All the items in step 4 will be sent to the insurance company and verified. The annuity policy is typically sent a few weeks later.

 

 

Posted by: Phil Barker: Phil is a leading expert in life annuities in Canada. His website Life Annuities.com is a recognized authority on annuities. Recently, he's been redefining how annuities are sold in Canada.