Life Annuities Blog

Wishing you a happy healthy holiday season!

Sincerely,

Ivon T Hughes

Alessio Rastani predicts that the “Market is Toast.” Apparently there is nothing Euro governments can do.

“First thing investors should do is protect their assets, protect what they have. The savings of millions of people are going to vanish. Be prepared and act now. The biggest risk people can take right now is not act”

A Life Annuity
You will enjoy a steady stream of income for life along with the security that you will never outlive your money. You’ll never have to worry about market fluctuations or other investment management decisions.

How it works: You simply deposit a lump sum of money and receive a guaranteed income stream for life.

Act now get an Annuity Quote.

Here are answers to questions a client asked me recently about life annuities.

Q. Please explain how the yearly guarantee works. Is it in addition to the life guarantee?

A. Yes, you always have the life guarantee for yourself and partner, if any. And you can choose to add a 10 or 20 year or similar guarantee that may outlive you.

Q. What about indexed annuities?

A. Click on the links comparing a life income indexed at 2% with a standard level annuity income. Now you can decide which one you want.

Q. Should I use RRSP funds or non registered funds to buy my life annuity?

A. RRSP funds can only be spent by yourself and your wife.If both deaths were to occur before the end of the 20 year period,an assessment of the present day value of the future payments would be made and that amount would be taxed. I will discuss this further with you.

Q. My RRIF payments keep  going up. Will a life annuity payment increase?

A. Annuity income is constant and does not increase as with a RRIF.

Q. How much of my life annuity income is insured?

A. Income up to a monthly amount of $ 2000 is 100% covered by Assuris, which is a group of all the insurance companies; I can send you a link if you wish.It is more important to split the capital in the way you think best with the life annuity companies you favour.

One of the options you have when you decide to use your retirement savings to provide a life income is an annuity, more correctly, in this case, referred to as a life annuity.

But strangely, from time to time, we meet people in the market for another life annuity, who are surprised to find out how exactly we get them the highest income. They may have bought their last annuity a year ago or even longer, but accepted the offer from the first company, without comparing the monthly income from other life insurance companies.

We think that this happens because people deal with agents who are restricted by their employer from offering companies which may have better life annuity rates. This to my mind is a restriction of trade which should be outlawed. It is completely unfair to the consumer who is not permitted to make a fair choice of any particular life annuity.

After preliminary quotes and conversations, we arrive at deposit and income dates , length of your guarantee, if any, and whether the amount should be split between a single and a joint annuity to provide the best life annuity income for each annuitant at the correct period.

There are also cash refund annuities and term certain annuities which can be considered to provide a secure lifetime income.

Parents, concerned as always with their children, even when adult, worry about leaving large sums of cash in their Wills.

Some children get married have their own children, solid jobs and a socially acceptable way of life. To them an inheritance can be left with little fear that it will be wasted.

But that is not the case with each child. Frequently as brokers, we are asked to design plans where the inheritance for a child can be made by way of an annuity. The two main reasons to select an annuity are that it is guaranteed for the life of the child and that it cannot be cashed. Thus the annuity, while providing lifetime income , prevents the child from having access to the capital.

This result can be achieved with a life annuity in a couple of ways.The first way is to have a joint life annuity with a parent and a child as joint annuitants, but the parent being the owner . As owner the parent receives the income during his or her lifetime and which passes to the child at death.

The second way is for the parent to invest funds today which will automatically purchase a life annuity at his or her death. Thus the capital invested has a chance to grow further before being annuitized. This should make for a larger annuity payment for the child when the annuity starts to pay out.