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Indexed Annuities 

Indexed-AnnuitiesIndexed Annuities protect the annuitant from inflation. They can be purchased for all account types including RRSP, RRIF, LIRA, LRIF and non-registered accounts. Prescribed non-registered annuities are not available for this benefit. Indexation is only available for non-prescribed annuities when purchased with non-registered money. When this benefit is added to the annuity the additional cost of this benefit reduces the annuity payments in the early years. Future annuity payments increase annually with indexation. Indexation can be a specified percentage per year or linked directly to inflation.

Inflation is directly correlated to cost of living also called consumer price index (CPI). Inflation is the biggest risk when purchasing an annuity. Indexed annuities provide the mechanism to mitigate the risk of inflation and the erosion of purchasing power. The indexation benefit of the annuity increases the annuity payment income stream annually. In the later years of the annuity the increases in the payment income stream is substantial. 

The chart above illustrates the effect of periodic withdrawals from GIC's and high yield savings accounts compared to indexed annuities. Periodic withdrawals made from GIC's and high yield savings accounts reduce the dollar amount of savings, provide no protection for inflation and eventually become depleted. The blue graph of indexed annuities not only provides protection for inflation but is guaranteed to continue to make ongoing annuity payments for life. With indexed annuities there is no risk of depleting your savings. The annuity payments will continue even if you already received annuity payments that exceed the amount of the initial premium paid to the insurance company when the annuity was purchased.


Annuities Are Complex Products That Require Professional Guidance

When deciding which type of annuity is best suited for you Stone-Hedge Financial Group Inc. will guide you through this process.

Stone-Hedge Financial Group Inc. will provide quotes from some of Canada’s most competitive insurance companies.


The information provided on this web site is intended for general information only. It should not be construed as legal, accounting, tax or specific insurance and investment advice. Clients should consult a professional advisor concerning their situations and any specific insurance and investment matters. While reasonable steps have been taken to ensure that this information was accurate as of the date hereof, Stone-Hedge Financial Group Inc. and its affiliates make no representation or warranty as to the accuracy of this information and assume no responsibility for reliance upon it.


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