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Life Annuities 

Life-AnnuitiesLife annuities come in two different forms, single or joint life. Single life annuities pay a periodic income stream for as long as the sole annuitant is alive. Joint life annuities pay a periodic income stream for as long as either of the joint annuitants are alive. Life annuities can be purchased with non-registered funds or with registered funds. Registered funds used to purchase a life annuity can be from individual RRSPs, locked-in RRSPs, pension plans or deferred profit sharing plans.

Life annuities can be purchased as single premium immediate annuity (SPIA). With single premium immediate annuities the annuitant purchases the annuity with a lump sum payment to the insurance company in exchange for guaranteed regular periodic income payments starting the following month. The insurance company makes these periodic payments as directed by the annuitant. The annuity payment income stream selected can be monthly, quarterly, semi-annually or annually.

A single life annuity will continue to make payments until the annuitant's life comes to an end. In order to receive the highest monthly annuity payments, the lump sum premium paid belongs to the insurance company even if the annuitant only received payments for one year. If this is a concern and you would like to leave an estate to your spouse or children Stone-Hedge Financial Group Inc. can provide a back to back annuity also called an insured annuity.  With a back to back annuity you can do both, receive a higher monthly annuity income stream and leave a lump sum tax free amount paid to your estate or beneficiaries.

Guaranteed life annuity income payments are higher for males than females of the same age. When a male and female of the same age purchase a guaranteed life annuity, the male will receive higher periodic annuity payments than the female. The shorter the life expectency the higher the annuity income payment income stream will be. 

A guaranteed period of years can be included in a single or joint life annuity. This ensures that the periodic annuity income stream continues for a specified minimum length of time or number of payments. The joint annuity payments will continue for as long as either of the annuitants are alive. If the annuitant (Single) or both annuitants (Joint) die prior to the expiration of the guaranteed period, the remaining guaranteed periodic annuity income payments will be paid as scheduled to the beneficiary or paid out as a lump sum (the payment is commuted).

Joint life annuities can be reducing or non-reducing, this will determine whether or not the surviving annuitant would receive reduced payments or the payments will remain the same after the death of either of the annuitants. A reducing annuity is suitable if more immediate income is required at the beginning of a joint annuity, then after the death of the primary annuitant or either one of the annuitants. After death of the primary annuitant or either of the annuitants the surviving annuitant would receive reduced payments for life. The majority of annuities we sell are non-reducing or in other words, regardless who dies first, the same income is paid for life to the survivor annuitant.


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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