Annuities

An annuity is an investment vehicle that converts a sum of money into a series of regular payments.  It allows the client to rely on a specific, regular payout without worrying about running out of money or having to make investment decisions. The payments are structured in order to give policyowners a set amount of money at regular intervals for a specific amount of time. An investor also has the option to choose lifetime payments. Annuities ensure that clients have a set income in future years.

The money used to purchase an annuity can be non-registered or registered. Some investment plans, including locked-in plans, require that an annuity be purchased at a certain age, usually age 80. Life Income Funds (LIFs) and Locked-In Retirement Income Funds (LRIFs), depending on the legislation, usually requires a person to purchase an annuity with any funds remaining in the plan when he or she turns 80 years old.

Annuities can also provide for beneficiaries or others. By opting for a joint annuity, the annuities provide payments based on the life expectancy of two annuitants. Annuities with guarantee periods also provide a less complicated option to provide for your beneficiaries by continuing payments to the beneficiaries upon the death of the annuitant without probate.

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