Please see information on Annuity Insurance below.



Annuities are usually sold by life insurance firms, and are more similar to a retirement plan than an insurance policy. An annuity provides a payout over time or immediately, depending on the type you choose.

An annuity is a contract between you and the annuity provider. You agree that by paying the provider a set amount, they will guarantee you with either fixed or variable payments over a set period of time. They are not strictly speaking insurance policies but are issued by insuerers.

What are the Types of Annuity?

There are many types of annuities on the market today, but they generally fall into a few categories.

  • Fixed or Variable

An annuity will be either Fixed or Variable. A fixed annuity is generally invested in 'secure' investments such as government bonds or certain corporate bonds. The rate on the annuity is usually guaranteed for a set period of time.

A variable annuity provides a wider choice of investments including market securities and fixed interest accounts. Variable annuities are generally tied to market movements.

  • Payout Options

You can choose from Immediate or Deferred annuities. An immediate annuity means that you receive payments immediately once you have taken your annuity. This is the best option if you are in need of fast and immediate income.

A deferred annuity insurance means that payments start later down the line often when the annuity holder reaches the age of retirement.

Are Annuities Suitable for All?

Annuities are not suitable for everyone. To begin with, you will need to be able to fully fund your IRA, your 403 (b) or your 401 (k) for the whole year. If you are able to fully fund these for the whole year and have money aside for investment, then you can consider annuities as a way to invest.

However, before you go for an annuity it is wise to consider all types of investment as there are many to choose from. You could opt for a mutual fund, bonds or even just a savings account from your bank.


Please Note: is not authorised to give advice under provincial and federal regulations.

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