Life Annuity

A Life Annuity offers guaranteed and predictable income for life, making it a reliable retirement income solution. It’s especially valuable for clients looking for financial stability and peace of mind in their retirement years. This annuity offers various options, as outlined in the table below:

Option	Description
Reversibility	Payments continue to a designated contingent annuitant after the annuitant’s death.
Guarantee Period	Ensures payments continue for a minimum period (even after death). For registered annuities, the guarantee cannot go beyond the annuitant’s 91st birthday.
Indexation	Payments can increase annually at a set percentage to help offset inflation.

Factors That Influence Annuity Payments

• Total amount invested
• Date the funds are received
• First payment date
• Selected annuity options (e.g. guarantee, reversibility)
• Age and gender of annuitant (and spouse, if applicable)
• Interest rate at the time of issuance
• Source of funds:
  • Registered plans: RRSP, RRIF, LIRA, LIF, RPP
  • Non-registered plans

There are various options for annuity payments, as outlined in the table below:

Feature	Description
Payment Method	Direct deposit or cheque
Payment Frequency	Monthly, quarterly, semi-annually, or annually
Tax Withholding	Optional, upon request
Minimum Payment	Payments under $25/month or $300/year are not allowed

End of Payments

• Payments stop upon the annuitant’s death
  • Note: This may vary depending on selected options such as guarantee or reversibility

Minimum Premium & Eligibility

• Minimum investment: $5,000
• Age requirement: Must be 18 years or older
• Proof of age required at time of application

Advantages of a Life Annuity

• Guaranteed, regular lifetime income payments
• Protection from market fluctuations
• Helps cover recurring living expenses
• No ongoing management required
• Non-registered annuities may qualify for:
  • Pension income tax credit
  • Pension income tax splitting (if eligible)

Restrictions

Item	Policy
Changes	No changes are permitted after issue
Surrender	May be surrendered at the commuted value (except prescribed annuities which are non-redeemable)

Taxation Rules

Type of Annuity	Taxation
Registered Annuity	Entire payment is fully taxable as income
Non-Registered Annuity
• Prescribed: Same tax amount annually
• Non-prescribed: Taxable portion decreases over time