Types of annuities
- Life annuity: income for as long as you live
- Joint life annuity: income continues for a surviving spouse
- Term-certain annuity: income for a fixed number of years
- Guarantee periods: ensure payments continue to beneficiaries for a minimum period if you die early
- Deferred annuities and guaranteed interest accounts: grow savings at a set interest rate for a set term, depending on the insurer
Things to weigh
- Once purchased, most annuities cannot be cashed in, so keep enough savings accessible
- Payments depend on age, interest rates at purchase and options chosen
- Inflation reduces purchasing power unless you choose an indexed option
- Registered funds (RRSP and RRIF) and non-registered money are taxed differently
Coverage descriptions are general. Your policy wording, limits and exclusions determine what is covered. Availability and premiums vary by insurer and by your circumstances.