What is an Annuity?
An annuity is an investment that provides a guaranteed income stream. In exchange for a lump-sum deposit, an insurer makes regular income payments that contain both interest and principal. Payments can continue for the life of one or two individuals or for a specified period of time.
Are There Different Types of Annuities?
Single Life Annuity
Provides a guaranteed income to an individual as long as he or she is living.
Term Certain Annuity
Provides guaranteed income for a specified period of time.
Joint and Survivor Life Annuity
Covers the lives of two individuals, a primary annuitant and a secondary annuitant (usually a husband and wife). Upon the death of one annuitant, the surviving annuitant will continue to receive the income.
Choosing the Right Annuity
Client doesn’t want retirement savings to run out in his/her lifetime Single Life Annuity.
In the event of his/her death, client wants spouse to have income Joint and Survivor Life Annuity
Client wants income for a set period of time, e.g. to cover a sabbatical or similar income gap Term Certain Annuity
Client wants lifetime income, but is concerned the annuity provider will keep the unpaid portion of the investment if he/she dies prematurely
Life Annuity with a principal protection guarantee option (cash refund guarantee)
Client wants lifetime income, but wants to make sure that, in the event of his/her premature death, the balance of any guaranteed payments are paid to a beneficiary
Life Annuity with a guarantee period
(zero to thirty years*)
Client is uncomfortable leaving a large lump sum to an heir or heirs Annuity Settlement Option
Client is over age 65 and would like to:
- Decrease his/her taxable income
- Increase his/her tax credits
- Life or Term Certain Annuity (non-registered)
- Life or Term Certain Annuity
*Some restrictions may apply.