Single Life Annuity
What is a single life annuity?
This type of annuity provides an income as long as the annuitant is living. When the annuitant dies, the contract ceases unless it contains a guarantee period.
Why not consider a single life annuity?
Single life annuities are ideal if you:
- are concerned about out-living your savings
- want to simplify investment decisions
- wish to minimize tax on investment income
With this approach you will be able to draw income from your RRSP savings. Also if you have non-registered savings, you buy a Single Life Annuity on which you will pay less taxes.
For single life annuities, you can select guaranteed payments up to age 90 to ensure a specific minimum amount is paid from the annuity. This will ensure your estate and/or beneficiaries will continue to receive income payments during the guarantee period in the event of your death.
These options guarantee that in the event of the annuitant's death, a beneficiary will receive the difference between the orginal premium and the payments already received. It could be a lump sum or a continuation of the annuity payments if the annuity is non-registered.
And these payments can qualify for the Pension Income Tax Credit.
Pension Income Tax Credit
The interest element of a non-registered annuity, both prescribed and non-prescribed, is eligible for tax credits if the annuitant is 65 years of age or older.