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Annuities

Would you like a higher lifetime income to enjoy retirement even more?

At one time, you could count on fixed-income investments for solid retirement income. But with today’s low interest rates, it’s a different story. The traditional instruments may not give you the income you would like.

Fortunately, there’s a way to maximize your income in a low interest rate environment if you fit this profile:

Your solution? An insured annuity.

An insured annuity sounds complicated, but it’s really quite simple. It’s a solution that uses two easy-to understand products – a life annuity and life insurance. A life annuity is a product you purchase with a lump sum of non-registered funds, in return for a guaranteed lifelong stream of equal payments. The payments are part interest, part return of capital—and that has a significant tax advantage. Tax is only payable on the interest portion, whereas interest income from traditional non-registered investments is fully taxable. That’s the annuity half. But if that’s all you did, you would leave no funds for your heirs.

Which brings us to the insurance half.

The tax savings you receive from the annuity are applied to insurance premiums on a life insurance policy. You purchase a policy that has the same value as your annuity. Buying a $250,000 life annuity? Then get a $250,000 life insurance policy. That amount is paid upon death to your beneficiary, tax-free. In other words, the capital originally invested in the annuity is recovered. So you receive greater payments throughout retirement than you would receive from fixed-income investments. Your loved ones receive a significant lump sum, tax-free.

Consider the many benefits of an insured annuity.

 

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