Annuities

Kick back and enjoy a guaranteed, life-long source of income in retirement with an annuity investment.

What are annuities?

Annuities are a type of contract between you (the annuitant) and an insurance provider. They’re designed to provide a guaranteed source of income and financial security once you retire.

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How do annuities work?

You give a lump sum to an insurance provider. In return, they promise to pay you a regular income from it. You can choose to get these payments for a specific period or for life.

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Why invest in annuities?

Guaranteed income

Annuities give you a reliable source of retirement income. You’ll know exactly how much you’re getting and when each year.

Simplicity & security

There’s no need to actively manage investments or worry about the markets with annuities; you simply receive your payments.

Tailored payments

You decide how often to get your payments. Monthly, quarterly, semi-annually, or annually – whatever works for you.

Flexible funding

You can buy an annuity with money from an RRSP, RRIF or other non-registered account. It’s up to you.

Is an annuity investment right for me?

Setting up an annuity investment can be a great way to boost your retirement income from other sources, like an RRIF. Because it gives you guaranteed, predictable payments, it can add financial security and peace of mind in your later years.

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Explore your annuity investment options

Term-certain annuity

What are term-certain annuities?

Term-certain annuities give you a regular income for a set number of years (a term). If you buy your annuity with money from an RRSP or RRIF, your term must go until age 90. If you pass away before the term ends, payments will continue to your estate.

Is this option right for me?

Term-certain annuities are often a good choice if you want to fund an early retirement without tapping into other savings.

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Life annuity

What are life annuities?

Life annuities give you a guaranteed income for life. If you pass away, the payments typically stop, and no money goes to your estate. However, you may be able to include an add-on that allows a chosen loved one or your estate to keep receiving payments.

Is this option right for me?

Life annuities are often a good choice if you want peace of mind that you’ll never run out of retirement income.

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Ready to set up your annuity

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Learn everything you need to know about the Registered Retirement Savings Plan (RRSP), how it works and its special tax benefits for you.

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Your annuity questions answered

How do annuity payments work?

Your income is calculated at the time you buy your annuity. It can be paid to you on a monthly, quarterly, semi-annual, or annual basis.

There are numerous factors that affect how much income you get, but the most important ones are:

Interest rate – the higher the current interest rate, the higher your annuity payments are likely to be.
Life expectancy – your age, gender, and health all impact how much you, as the annuitant, receive.
Amount deposited – the size of your initial annuity investment will, of course, affect how much you get in income from it.

Are annuity investments taxed?

Yes, the income you receive, as an annuitant, is taxed. How much it’s taxed depends on what source you used to buy your annuity:

Pension plan, RRSP, or RRIF – if you used money from pension or registered savings, your annuity payments will be fully taxed in the year you receive them.
Non-registered accounts – if you used money from non-registered savings like mutual funds, only a portion of the payments you get are taxed.

Can I change my annuity’s payment schedule?

No, unfortunately, you can’t make any changes to your annuity after you’ve bought it. So it’s important to consider your options thoroughly before locking in your payment schedule.

If you’re unsure, book a chat with one of our advisors. They’ll be happy to help review your situation and figure out the best solution for you.

How is my annuity protected?

All Canadian life insurance companies must be members of a consumer protection agency called Assuris. They insure an annuitant’s income:

100% for monthly payments up to $5,000
90% for monthly payments above $5,000

This coverage is automatic. You don’t have to do anything or pay anything to receive it.

Have more questions?

Don’t hesitate to reach out. We’re just a live chat, video, or phone call away when you need us.

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Disclaimer: Insurance products are offered through Gulf and Fraser Insurance Services Ltd., a wholly-owned subsidiary of Gulf & Fraser. This website is for informational purposes only and is not intended to provide specific insurance, financial, investment, tax, or other advice to you, and should not be acted or relied upon in that regard. Insurance products are underwritten by certain licensed insurance companies and are only available throughout British Columbia, Canada.