Annuities

Annuities allow you to convert your registered and non-registered savings into periodic income

The advantages of annuities
Establishing annuity amounts
Types of annuities

The advantages of annuities  

• A guaranteed periodic income for the period of time you select when you purchase your annuity (15, 20, 25 years) or until your death.
  
  
• A worry-free retirement when it comes to finances and money management.
  
  
• The possibility of taking advantage of a secure income stream and a certain flexibility when combining your annuity with a RRIF or an RRSP.
  
  
• Assuris coverage if your annuity is set up by Desjardins Financial Security.
  
  
• Coordination with federal government Old Age Security benefits if the annuity is registered.

The following is taken into account when establishing the annuity amount:  

• The principal available, in other words, the accumulated funds, and the payment frequency selected by the annuitant.
  
  
  • The higher the principal, the higher the payment amount.
    
    
• The interest rate in effect at the time the annuity is purchased.
  
  
  • The interest rate used to calculate the annuity remains the same for the term of the payments, regardless of future rate fluctuations. 
    
    
• The guaranteed payment term of the annuity, for a term certain annuity.
  
  
  • The longer the guaranteed payment term, the lower the payments.
    
    
• The age and sex of the annuitant and their spouse, for a joint and survivor life annuity. These two factors are used to establish the life expectancy of the annuitant and their spouse:
  
  
  • The older the individual, the shorter their life expectancy and the higher the payments, and vice versa.
    
    
  • A woman's life expectancy exceeds that of a man.
    
    
• The options chosen by the annuitant at the time of purchase. The more options that apply to the annuity, the greater the impact these options will have on the amount of the payments.

Types of annuities   

Term certain annuities (or fixed-term or term annuities)

Term certain annuities provide an income for a specified term. If the annuitant dies before the end of the set period, their designated beneficiary will continue to receive the annuity payments until the end of the period specified in the contract.

Life annuities

Life annuities provide a guaranteed fixed income which is paid at regular intervals until the annuitant's death. Only life insurance companies offer life annuities.

It is possible to add one or more options to a life annuity, such as indexation, guaranteed payment term or joint and survivor. You must add these options to your annuity at the time of purchase.

Impaired risk life annuities

Impaired risk life annuities are intended for individuals with shorter life expectancies due to serious health problems. To purchase this type of annuity, clients must provide the medical information required by the insurer, which, after analysis of their medical file, will present them with a quote.

Contact your advisor to help you make the right choice based on your needs..