About Insured Annuities

Insured Annuities

An Insured Single Life Annuity is the unique concept of purchasing a single premium prescribed life annuity with little or no guarantee period to generate income for a person's lifetime. This kind of annuity on its own does not provide any estate benefit but it produces the largest amount of monthly income of all the forms of life annuities. For estate purposes, the annuitant uses some of the income from the annuity to purchase a permanent life insurance policy, normally for the amount of the annuity.

The insured single life prescribed annuity ensures the annuitant a high after-tax income during his/her lifetime and the insurance protects the annuitant's capital while providing an estate benefit for his/her spouse or children.

Compared with traditional income-generating investments, insured annuities offer distinct advantages even when compared with the most conservative of investment vehicles. For example, many seniors keep a large portion of their investments in monthly interest term deposits. The advantage being that their capital is secure and the investment provides a regular income based on prevailing interest rates.

Insured Single Life Annuities can be purchased with amounts as little as $10,000. Generally, the older you are, the better the income from this kind of annuity. The most benefit is received from a non-registered prescribed annuity because of the preferential tax treatment given to the income received.

The following illustration shows the resulting annual after tax income for a male, age 65, non-smoker in a 40% tax bracked received from the equivilant of a 5 year non-registered term deposit receiving 4% interest compared to a non-registered life insured annuity. Annuity and life insurance figures are calculated as of June 2005. Totals are rounded to the nearest dollar.

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