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Contents

Introduction

Chapter 1

Annuity Types:

Single Life Annuity

Joint Life Annuity

Term Certain Annuity

 

Registered and Non-Registered

Factors that affect annuity income

Advantages of an annuity

Disadvantages of an annuity

 

Chapter 2

Why an annuity?

Annuity Popularity

 

Annuity Options:

Guarantee period

Indexing

Deferred

Impaired

 

Chapter 3

Turning 71

RRIFs

RRIF or an Annuity?

Annuity Taxation

Assuris Protection

 

Chapter 4

Annuity Pros & Cons

Annuity FAQ

List of Annuity Companies

Annuity Fees

 

Chapter 5

Male Annuity Rates

Female Annuity Rates

Joint Annuity Rates

 

 

Chapter 6

Annuity Calculator

Sample of an Annuity Policy

Annuity Quote Illustration

 

Conclusion

Chapter 4: Annuities Pros & Cons

Chapter 4. Highlights

Annuity Pros & Cons

 

Annuity FAQ

 

List of Annuity Companies

 

Annuity Fees

 

Annuity Pros & Cons

Pros

Life Annuities pay more than GICs for the same dollar
Cannot outlive income
No investment or management decisions
Can spend every penny without worry
Assuris insurance coverage up to $2,000 per month
Prescribed Annuities are tax efficient

 

Cons

After you commit to the terms of an annuity, you cannot change them.

Income payments cannot be adjusted to reflect changing needs
Permanently replaces investment capital
Decision once made is final, can’t convert an annuity into another form of retirement income

 

Annuity FAQ

Why should I buy an annuity?

An annuity can guarantee stable and predictable income for life, regardless of market conditions or interest rate fluctuations.

 

Will I ever outlive my money if I purchase a life annuity?

With a life annuity, you will never outlive your money.

 

Do I need to add a guarantee period to an annuity?

No. Payments can be guaranteed for a specific term (e.g.5, 10 or 20 years). On its own, this is a term certain annuity. When included in a life or joint life annuity, upon your death/co-annuitant’s death, this may provide guaranteed payments to your beneficiary, which will continue until the term expires.

 

Prescribed or Non-Prescribed Annuity – What’s the difference?

Annuity payments are made up of an interest component and a return of principal. If the annuity is non-registered, only the interest component is taxed.

 

If an annuity qualifies* for prescribed tax treatment, the tax payable is spread evenly over the life of the contract.

 

If an annuity does not qualify for prescribed taxation, interest is taxed on an accrual basis so the tax will be higher in the early years of the annuity and will decrease over the life of the contract as the principal decreases.

 

 

Annuity Fees

There are typically no fees involved when purchasing an annuity policy. An insurance broker or agent is paid by the insurance company that sells you the annuity.

 

List of Annuity Companies

Only Canadian insurance companies in Canada can sell annuities but not all companies sell annuities. The list below is a list of insurance companies that sell annuities in Canada.

Assumption Life

BMO Life insurance

Canada Life Insurance

Empire Life Insurance
Equitable Life

Foresters (was Unity Life)

Industrial Alliance

La Capitale Insurance

Manulife Financial

Standard Life Insurance

Sun Life Financial

Transamerica Life Insurance

 

continue... Chapter 5. Annuity Rates

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