Life Annuity in Canada

A guaranteed annuity income stream

A life annuity might be right for you if you want peace of mind in retirement. It is designed to convert your savings into a guaranteed income stream for either:

• a set period of time (term certain annuity), or
• your entire life (life annuity)

For many people in Canada, a life annuity (or term certain annuity) is an easy, worry-free answer to retirement income needs and is the best way to maximize guaranteed income.

How a life annuity works?

You save for your retirement. You want the money you have saved to provide an income for as long as you live, or at least a certain period of time (like 10 or 20 years). So, you decide to buy a life annuity (or term certain annuity) from Life Guard Insurance: (we always have access to the best rates).

 The insurance company calculates how much your income will receive be based on factors such as:

• long term interest rates, and
• how long the average person your age will live

Life Guard Insurance brokers compares the different annuity income amounts from all competing insurance companies and picks the best one for you. Then, after you deposit your savings, the insurance company sends you money for the rest of your life (or the period you specify) much like a paycheque during retirement via your annuity policy.

You can buy different types of annuities:

1. Life annuity – provides income payments for as long as you live – usually with a guarantee that they’ll continue to a beneficiary in case you die earlier than expected (the most popular and simple annuity contract).

 2. Joint and last survivor life annuity – income payments for as long as you and your spouse live – payments to the last survivor.

3. Term certain annuity – gives a specified number of income payments. If you die before all the specified payments have been made, a death benefit is paid to a beneficiary.

How an annuity can fit into your financial plan

These are some reasons why you might want to buy an annuity, rather than a RRIF or LIF:

• You don’t want to risk outliving your savings (Longevity Risk)
• You want guaranteed payments, to pay ongoing fixed expenses
• You don’t want to make any more investment decisions – simplicity

A life annuity or term certain annuity provide an income for life or for a specific period of time. As part of a financial plan they can play a valuable role, providing a guaranteed income in your later years. You may have other income products contributing to your overall cash flow – a life annuity will give a predictable and guaranteed amount. Remember – a life annuity does not have to be your entire nest egg. It can be the safety portion of your retirement income, guaranteeing you can pay for basic living expenses. This will allow you to be a bit more aggressive with you remaining portfolio if you wish.

If you would like more information about a Life Annuity in Canada, please contact Life Guard Insurance.